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Globalization of human resources: Expatriation in AsiaPacific

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Title: Globalization of human resources: Expatriation in AsiaPacific


1
Unit 6
  • Globalization of human resources Expatriation in
    Asia-Pacific

2
Objectives (I)
  • Critically comment on the importance of
    international human resources within MNEs
  • Analyze alternative staffing policy options and
    the reasons for selecting a particular strategy
  • Outline the challenges of expatriate selection,
    preparation and repatriation
  • Analyze the issues raised in successful staff
    repatriation
  • Distinguish between expatriation and impartation

3
Objectives (II)
  • Discuss the limitations of traditional approaches
    to expatriate management
  • Discuss the principal differences between
    expatriate managers and global managers
  • Analyze the strategies companies might adopt to
    utilize fully the expertise and experience of
    repatriated staff and apply these to career
    management and development
  • Explain how effective global competitors are
    moving towards an integrated approach to
    expatriate management that is increasingly
    focusing on the production of global managers

4
Introduction (I)
  • Organization attempt to manage human resources
    across national boundaries
  • Due to the enormous transformations taking place
    in the social, political, economic and
    educational environment
  • Requirements for increased utilization of
    technology, demand a well-education and trained
    workforce
  • Effective HRM is the most of critical processes
    contributing to an organizations ability to
    respond rapidly to change

5
Introduction (II)
  • Expatriate staff (work outside their country of
    the national origin) are an expensive and
    problematic resource
  • There are 2 main difficulties likely to be
    encountered when managing or utilizing expatriate
    staff
  • Arisen when people work in unfamiliar locations
    and environments
  • Failure
  • Premature return from, or under-performance in,
    an assignment
  • Difficulties of re-integrating returning staff
    into the home organization
  • Dual career families and the growing number of
    women expatriates

6
Introduction (III)
  • Challenges arises from the dynamic nature of the
    international business environment
  • Traditional model of expatriate management
    increase appropriate
  • Balance the demands of global and regional market
    development
  • Increased aware of the limitations of traditional
    executive managers
  • Demanding new breed of executive, the so-called
    global manager
  • Familiarity with a range of international
    business environments
  • Ability to move easily across geographical,
    functional and cultural boundaries
  • HRM be able to develop company structures and
    policies that truly support each aspect of an
    international assignment

7
International staffing policy (I)
  • Concerned with the selection of employees for
    jobs (require the particular skills)
  • Staff policy can be a tool for developing and
    promoting the corporate culture of the
    organization
  • 3 types of people available to fill international
    management positions in both an organizations
    headquarters and foreign subsidiaries
  • Parent-country nationals (PCNs)
  • Firm has corporate headquarters

8
International staffing policy (II)
  • Host-country nationals (HCNs)
  • Nationals of country where a subsidiary is
    located
  • Third-country nationals (TCNs)
  • Outside both
  • Example of Taiwanese manager
  • Companies rely on HCNs for lower-level positions
    and tend to favour PCNs and TCNs for certain
    technical or managerial positions
  • Chief executive officer and the chief financial
    officer

9
International staffing policy (III)
Advantages and disadvantages of PCNs
10
International staffing policy (IV)
Advantages and disadvantages of HCNs
11
International staffing policy (V)
Advantages and disadvantages of TCNs
12
International staffing strategy (I)
  • Ethnocentric approach
  • Company essentially believes that PCNs are better
    qualified, and perhaps more trustworthy, than
    HCNs and TCHs
  • Advantage of PCNs appears to be their familiarity
    with the parent companys way of doing things
  • Disadvantage of PCNs lack of awareness of local
    cultures
  • Peruse an ethnocentric staffing policy for a
    number of reasons
  • Lack of qualified HCNs to fill senior management
    positions

13
International staffing strategy (II)
  • Maintain its unified corporate culture
  • Example of Japanese firm
  • Foreign operations to be headed by expatriate
    Japanese managers
  • Establishing in early stages of
    internationalization
  • New business, process or product in another
    country and prior experience is essential
  • Transfer its core competencies to a foreign
    operation
  • Polycentric approach
  • HCNs are recruited to manage subsidiaries in
    their own country while PCNs occupy positions at
    corporate headquarters
  • Belief that local people know the local
    environment better than anyone else does

14
International staffing strategy (III)
  • Allow subsidiaries in different countries to set
    their own standards
  • Example as Nestlé
  • Geocentric approach
  • Policy staffing with the best person suited for
    the job, regardless of national origin
  • Example as Motors and Xerox
  • Advantages
  • Develop an international executive team
  • Solve specific problems and perform a wide
    variety of ongoing activities
  • Overcomes the federation drawback of the
    polycentric approach

15
International staffing strategy (IV)
  • Disadvantages
  • Obtaining a work permit for PCNs and TCNs
  • The host government may utilize immigration
    controls to encourage HCN employment
  • Expensive to implement because
  • Widespread recruitment may result or be needed
  • Substantial investment in cultural orientation
    and language training programmes for managers and
    their families might be necessary
  • Substantial costs in transferring executives and
    their families into and away from foreign posts
    will definitely be incurred
  • Salary levels of expatriates maybe higher than
    national levels in many countries

16
International staffing strategy (V)
  • Regiocentric approach
  • Recruiting is done on a regional basis
  • Grouped geographically, culture, experiences and
    practice can be transferred within each regional
    group
  • Examples of Pepsi-Cola, ABB and IBM
  • Advantages
  • Sensitivity to local conditions
  • Local subsidiaries are staffed almost totally by
    HCNs or at least TCNs familiar with the region
  • International firm to gradually move from a
    purely ethnocentric or polycentric approach to a
    geocentric approach

17
International staffing strategy (VI)
  • Disadvantages
  • Create federalism at a regional rather than a
    country level and constrain the organization from
    taking a global stance
  • Improve career prospects at the national level,
    move the barrier to the regional level
  • Advance to regional headquarters but rarely to
    positions at the parent headquarters
  • Inpatriation strategies
  • Transferring interational managers from their
    overeas assignments to the home market on a
    permanent or semi-permanent basis

18
International staffing strategy (VII)
  • Allows the creation of truly multicultural and
    multinational organizations
  • Example as Shell
  • Crucial linkages between home and home
    organizations
  • Strategy of inpatriation has much to offer
  • Rapidly increase cognitive diversity within an
    organization
  • Decision making and facilitates
    inter-organizational trust and communication
  • Communication point for host country managers
    ensuring a greater clarity of vision
  • Effective strategy of globalization
  • Overcome some of the limitations of traditional
    expatriates
  • More likely than expatriates to accept
    assignments to emerging markets where
    infrastructure is likely to be underdeveloped

19
Expatriate recruitment and selection (I)
  • Recruitment
  • Through identifying overseas managers who are
    currently working for the firm in a host country
    or managers
  • Undertake an international assignment in the host
    country
  • The reasons for employing those people are
  • Unavailability of host country nationals who have
    the technical expertise or managerial talent
  • Maintain and facilitate organizational
    coordination and control
  • Maintain a foreign image in the host country
  • More promising managers with international
    experience and so equip them for more responsible
    positions

20
Expatriate recruitment and selection (II)
  • External recruitment methods have two benefits
  • Hiring bring in seasoned management experience
    and personal maturity
  • Accustomed to working and living in different
    cultures
  • Drawbacks of external recruitment
  • Search process is expensive
  • Reputable national and international executive
    search firms impose high charges
  • Difficult to manage and implement due to the
    distance involved
  • Expatriate manager recruited from outside may
    find it difficult to adjust to the new
    environment

21
Expatriate recruitment and selection (III)
  • Selection
  • Resource managers must decide which candidates
    from the pool are the best qualified for overseas
    assignments
  • Unfamiliar sets of environmental forces that can
    be very different those of the home country
  • Devise a suitable selection process for
    candidates and their family members when
    contemplating sending them on an overseas
    assignment
  • Appropriate criteria are suggested below
  • Adaptability of expatriates and family members
  • Most expatriate failure is not caused by
    inadequate technical skills
  • Inability of expatriates and their families to
    adjust to an unfamiliar culture
  • Adapt to new circumstances and situations and to
    respond flexibly to different ideas

22
Expatriate recruitment and selection (IV)
  • Solve different frameworks
  • Culture, polities, religion, ethic or different
    perspectives
  • Family situations reason for expatriate failure
  • In-depth interviews help assess adaptability
  • Explore the level of marital stability,
    responsibilities for ageing parents, existence of
    learning disabilities in a child, behavioral
    problems in teenagers, emotional stability of
    family members
  • Technical skills
  • Located at some distance from headquarters or the
    centre of technical expertise
  • Human empathy and cross-cultural sensitivity may
    be more important than technical skills

23
Expatriate recruitment and selection (V)
  • Personal traits and relational abilities
  • Deal effectively with their superiors, peers,
    subordinates, business associates and clients
  • Ability to related to, live with and work among
    people whose value systems, beliefs, customs,
    manners and ways of conducting business may
    differ greatly from one own
  • Maturity and emotional stability
  • Maintain emotional equilibrium at all times
  • Interpersonal skills
  • Verbal and non-verbal communication, the capacity
    to build trust and ability to utilize referent
    power when managing within foreign environment
  • Expatriate manager should be a skilled negotiator
  • Obtain the treatment for treatment for the
    foreign host countrys government

24
Expatriate recruitment and selection (VI)
  • Expatriates sometimes have to train local
    replacement and transfer knowledge to their local
    colleagues
  • Foreign language proficiency
  • Confidence in interacting with locals will lead
    to successful overseas assignment
  • Managerial and decision-making abilities
  • Expatriates are operating under conditions of
    isolation or physical distance from the centre of
    decision-making in the home office
  • Candidates must have knowledge of management
    practices and the ability to put them into
    practice
  • Other criteria age, gender and race
  • Some countries are male dominated, such as Japan

25
Expatriate recruitment and selection (VII)
  • Cross-cultural and technical skills resulted in a
    number of approaches that international companies
    used
  • Any weaknesses identified are addressed through
    appropriate training and personalized development
    plans and timetable are drawn up
  • Recruitment to students from universities
    considerable international orientation through
    travel, language acquisition or cross-cultural
    experience

26
Expatriate failure and repatriation problems (I)
  • Companies are likely to face both direct and
    indirect costs
  • Overseas compensations, allowances and
    repatriation costs
  • Indirect costs
  • Loss of time and business opportunities
  • Damaged relations with the host country
    government
  • With local organizations
  • With direct customers in the foreign country
  • Long-team negative impact upon the firms
    reputation in the regional area

27
Expatriate failure and repatriation problems (II)
  • Expatriates costs
  • Damaged career prospects
  • Emotional upheaval
  • Reduced self-esteem
  • Self-confidence
  • Job satisfaction
  • Prestige among peers
  • motivation
  • Some factors can contribute to expatriate
    failure
  • Inappropriate selection criteria and/ or policy
  • Resolve a staffing crisis in an overseas
    subsidiary
  • Tend to choose only on criteria such as technical
    skills
  • Tend to ignore such factors the expatriates
    personality, ability, emotional characteristics,
    family situation and cultural knowledge

28
Expatriate failure and repatriation problems (III)
  • Lack of pre-departure programmes for expatriates
    and their families
  • Cross-cultural and language training assists
    expatriates in recognizing the likely
    difficulties
  • Pre-departure programmes should include critical
    family issues
  • What the partner do, childrens schools, medical
    coverage and making friends
  • Inadequate support mechanisms
  • Compensation packages
  • Career support
  • Repatriation practice

29
Expatriate failure and repatriation problems (IV)
  • Repatriation problems
  • Expatriates re-entering the home organization at
    the end of their assignment requires attention
  • Loss of highly capable employees
  • Underutilization of skills
  • Reluctance by others to accept overseas
    assignments
  • Problems often arise where companies maintain a
    sharp division between their domestic and
    operations
  • Equally damaging can be the situation that
    considered in some way secondary to domestic
    business

30
Expatriate failure and repatriation problems (V)
  • Tendencies can result in problems with
    repatriation
  • Send overseas medicore performers and limited
    career progression upon repatriation
  • Desire to transfer problem staff or reluctance
    of high potential staff to follow the overseas
    track
  • Expatriates suffer an out of sight, out of mind
    situation that considered of new positions or
    promotions until they return
  • Limited job opportunities at the time of re-entry
  • Employee must re-enter the same division or short
    planning horizons can restrict opportunities
  • Repatriates are often disappointed by the
    reception they receive
  • Their skills and experience may be undervalued
  • Less than challenging position may result in a
    decision to leave the organization

31
Expatriate failure and repatriation problems (VI)
  • Repatriation problems are often symptomatic of
    more deeply entrenched HR difficulties
  • Inability to effectively utilize resources
  • Reflected in too short a term focus
  • Inability to integrate domestic and foreign
    experience
  • Limited authority of the HR function
  • Strategies available to international
    organizations that can result in more effective
    repatriation process
  • Select more competent staff to place on overseas
    assignment
  • Higher demand upon their return and placed into
    challenging positions

32
Expatriate failure and repatriation problems (VII)
  • Assign a formal mentor to expatriates
  • Keep channels of communication open and to ensure
    that the interests of the expatriate are
    represented at a senior level
  • Link overseas assignment to long term career
    development
  • Increase the return on a period spent overseas
    and encourage the most able staff to consider
    such appointments
  • Plan the timing and pattern of re-entry better
  • Greater flexibility in overseas assignment could
    contribute significantly to the planning of
    re-entry
  • Appropriate positions in the home market

33
Expatriate failure and repatriation problems
(VIII)
  • Final strategy would be to use repatriates as
    trainers of future expatriates
  • Ensure knowledge acquired overseas is passed on
  • Foster a more receptive environment for
    international staff
  • Enjoy a greater commonality of shared experiences
    and concerns
  • Both HK and China emphasized problem-focused as
    opposed to symptom-coping strategies since the
    former is associated with more positive
    adjustment

34
Challenges of expatriates (I)
  • Cultural dimensions and orientations
  • Expatriate managers will face in Asia-Pacific
    region is to utilize Hofstedes cultural
    dimensions framework
  • Or examine differences through this
  • Power distance
  • Less powerful members of institutions and
    organizations within a country expect
  • Accept that power is distributed unequally
  • Autocratic policies can be pursued
  • Acceptance of wage and salary differentials
  • Acceptance of status and position
  • Institutionalization of power through hierarchy

35
Challenges of expatriates (II)
  • Individualism
  • Contrasted with collective cultures where people
    identify with strong, cohesive groups
  • The importance of harmony, the balance between
    tasks and relationships and the criteria for
    promotion
  • In Confucian cultures the family is the basic
    defining group
  • Masculinity
  • Tend to rate achievement and success much more
    highly than the quality of life or caring for
    others
  • Management practices will reflect the salary
    versus working hours, competition in the
    workplace and styles of leadership

36
Challenges of expatriates (III)
  • Uncertainly avoidance
  • People are socialized into accepting ambiguity
    and tolerating uncertainty about the future
  • Organizations in cultures which rate high on
    uncertainty avoidance are characterized
  • Tightly structured
  • Follow written rules
  • Managers become involved in operational details
  • Unlikely to undertake risky decision
  • Long-term orientation
  • Most clearly contrasted with Anglo cultures in
    terms of this final dimension
  • Anglo cultures are much more short-term in their
    orientation

37
Challenges of expatriates (IV)
  • Overwhelming tendency in the region for
    collectivism
  • High power distance and an emphasis on the long
    team
  • Importance of paternalism and relationship-focused
    management in the region
  • Women and dual career issues
  • Situation of a female going overseas is seen as
    more problematic than that of a male assignee
  • Some problems arise within MNEs
  • Perception that women are not interested in
    overseas assignments

38
Challenges of expatriates (V)
  • Foreign prejudice towards women, women in the
    workforce
  • Belief that dual career marriages make it more
    difficult to take on an overseas assignment
  • Womens lack of interest
  • Women are less interested in overseas assignments
    than their male counterparts
  • Because of the way they perceive their family
    role
  • Their career and their greater fear of isolation
    and loneliness in a foreign culture
  • Foreigners prejudice
  • Women expatriates would be ineffective as
    managers in all international assignments
  • Limit international management participation for
    women

39
Challenges of expatriates (VI)
  • Dual career issues
  • Dual career marriages are considered a major
    reason that companies avoid sending women
    managers abroad
  • Male partners face additional obstacles in terms
    of adjusting to the role of secondary breadwinner
    of homemaker
  • Women make the transition to these role easier
    than men
  • Negative or natural career move can br
    troublesome for men
  • Female brings distinct disadvantages in working
    internationally, the perception among female
    expatriates themselves is quite different
  • Female expatriates enjoy advantages
  • Visibility
  • Foreign clients are curious about them, anxious
    to meet them and tend to remember them better

40
Challenges of expatriates (VII)
  • Interpersonal skills
  • Local men to talk to because women are often more
    nurturing than men
  • Women listen better and have more patience
  • Adjustment
  • Greater ability to adjust to the isolation during
    foreign assignments than their male counterparts
  • Novelty
  • Tend to assume that the women would not have been
    sent unless they were the vary best
  • The major difficulties include home companies
    barriers, misconceptions, gender-specific laws
    and unintentional discrimination
  • Home companies barriers
  • Limit the female expatriates professional
    opportunities and job scope

41
Challenges of expatriates (VIII)
  • Increase the difficulty of achieving success in
    the foreign assignment
  • Misconceptions
  • Female expatriates may be misconceived as
    subordinates or as women accompanying a spouse
  • Challenge the credibility, authority and
    responsibility of women expatriates
  • Gender specific laws
  • Face difficulties resulting from regulating
    entry, movement and activity within countries
  • Unintentional discrimination
  • Strongly masculine culture that blind to its
    ingrained bias and slow to change

42
Changes in international staffing policy and
strategy (I)
  • Prompting a reconsideration of traditional
    expatriate policy
  • Encouraging international HR managers to give
    careful consideration to their expatriate
    policies
  • Globalization, strategy alliances and regional
    strategies are rending the traditional expatriate
    model increasingly ineffective
  • Some factors are providing opportunities or
    pressures for major change in staffing strategy
    and policy
  • Education
  • Increasing number and level of qualified people
    world-wide

43
Changes in international staffing policy and
strategy (II)
  • Telecommunications
  • Provided better access to resources, wider
    coverage and lower cost
  • Break down international barriers and made the
    world smaller and more accessible
  • Air travel
  • Larger number of locals can be employed as it is
    easier for headquarters to monitor them
  • Increasing global congruence
  • Reduced by the development of regional trading
    agreements
  • NAFTA, the EU and ASEAN
  • Increased convergence in areas such as sport and
    entertainment

44
Changes in international staffing policy and
strategy (III)
  • Host government policy
  • Optimize and utilize the talent pool available
    domestically
  • Through immigration policy and visa requirements
  • Use of non-traditional forms of international
    market servicing strategy
  • Strategic alliances
  • Increased competitive pressure and recognition
  • Advantage now lies with human capital resources
  • Limitations of expatriates assignments encouraged
    the development of a new class of international
    executive-The global manager
  • Human resource is internal discuss the principal
    changes in a little more detail

45
Changes in international staffing policy and
strategy (IV)
  • The demands of global strategy
  • MNEs have matured through international
    communications, travel, transportation and
    distribution infrastructure
  • Globalize or standardized approach towards
    sourcing, production, marketing and functions is
    both feasible and desirable
  • The global firms that emerge are often structured
    by products or product/region matrices and
    require substantial coordination across local
    market
  • Reduce PCN staff at operative levels
  • Increased the use of expatriates in strategic
    functions

46
Changes in international staffing policy and
strategy (V)
  • Reduce the need for PCNs abroad
  • Require the HCN to train in the home country
    headquarters
  • Termed as a foreign country national (FCN)
  • Adapt MNE foreign operations to host country
    cultures
  • Provides the mode of operation of MNEs in their
    home countries
  • Strategic alliances
  • Market economies have been increasingly willing
    to participate in cooperative ventures with their
    direct competitors

47
Changes in international staffing policy and
strategy (VI)
  • The partners in an alliance maintain their
    individual identities and engage in other
    activities
  • Expansion through mergers and acquisitions of
    established competitors
  • The merging of different organizational cultures
    may require HCNs to spend time at the
    headquarters
  • Rationalization
  • Aims at economic growth through the widening of
    domestic markets to allow economies of scale and
    facilitate international exchange

48
Changes in international staffing policy and
strategy (VII)
  • Firms to use relatively more or fewer PCNs rely
    on the degree of within-region integration
  • Fortress-type regions
  • Due to more pronounced motives of control
  • Know-how transfer associated with undertakings to
    generate greater value added within regions
  • Open regions, competition is harder and use of
    HCNs before PCNs
  • Makes control of subtle differences in customer
    demand
  • Effective handling of local matters crucial for
    success
  • Operative positions by HCNs rather than by PCNs,
    take the form of networks including suppliers
    and/or customers
  • Global teams address certain problems, implying
    short-term assignments
  • Companies with a more comprehensive picture of
    customers needs
  • Profit from the synergy to unify the varying
    perspectives of different cultures and different
    business dunctions

49
The expatriate manger versus the global manager
(I)
  • The crucial determinant of success in global
    business is effective development of global
    mangers
  • Define a global manager
  • Flexible and open mind
  • With a well-rounded understanding of
    international business
  • Ability to work across cultural
  • Functional boundaries
  • Balance the simultaneous demands of global
    integration and national responsiveness

50
The expatriate manger versus the global manager
(II)
Contrast between expatriate and global managers
51
The expatriate manger versus the global manager
(III)
52
The expatriate manger versus the global manager
(IV)
  • TCNs are multilingual and ability to work in more
    than one language and may exhibit greater
    cultural sensitivity
  • PCNs manager selected ob the basis of technical
    ability with little attention paid to
    international experience
  • Place importance on local hiring may consider
    TCNs just as unacceptable as PCNs
  • MNEs develop their globally sophisticated
    managers
  • Trend towards greater teamwork, cross-functional
    teams
  • Comprise different cultures, languages, locations
    and time zones

53
Unit 6
  • The end
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