Staffing Policies & Expatriate Selection Session-19

Parent-country Nationals Advantages  Control and co-ordination by HQ is maintained.  Promising managers get international experience.  PCNs may be the best people for the job.  Assurance that the subsidiary will comply with company objectives policies etc. Disadvantages  HCNs promotion opportunities are limited.  Adaptation to host country may take a long time.  PCNs may impose an inappropriate HQ style.  Compensation differences between PCNs and HCNs may cause problems. Staffing & Selection

Host-country Nationals Advantages No problems with language and culture. Reduced hiring costs. No work permits required. Continuity of management improves since HCNs stay longer in positions. Govt. policy may force hiring of HCNs. Promotional opportunities not limited - so higher morale among HCNs. Disadvantages HQ may have less control over operations. HCNs may still have limited career opportunities outside the subsidiary. Hiring HCNs limits opportunities for PCNs to gain overseas experience. Hiring HCNs may encourage a federation of disintegrated national units rather than one integrated global unit. Staffing & Selection

Third-country Nationals Advantages Salary and compensation may be lower than for PCNs. May be more familiar with host country than the PCNs. Disadvantages Transfers must consider national animosities. Host government may resent TCNs as much as PCNs. TCNs may not comply with HQ style of management. TCNs may not want to return after assignment. Staffing & Selection

1. Technical Ability -Persons’ ability to perform a job -Past experience has little or no bearing on the technical skills (or lack of it) -Skills are critical but success depends on how individuals handle the situation 2. Cross-Cultural Suitability -Country of posting & its culture influence the selection of the candidate -Importance of cultural sensitivity in expat assignments -Difficult to generate formal procedures for assessment -AT&T Questionnaire to be answered by candidates & spouses oCan you imagine living without TV? oWhat is your tolerance for waiting for repairs? oHow important is it for you to spend significant amount of time with people of your own racial, ethnic & national background? oHow do you feel if your client does not come on time?

Staffing & Selection 3. Family Requirements -Contributions of the family to expatriate success are tremendous -Place of family in “hardship postings” –remote areas far away from major cities or major facilities with high physical risks -Reluctance to select women for certain middle east or south east Asian nations 4. Multinational Requirements -Attitude of the MNE involved (ethnocentric, polycentric, geocentric etc.) -The mode of operation involved (IJVs require a great deal of local input) -The duration of the assignment -The amount of knowledge transfer inherent in the expatriate’s job in foreign operation

Staffing & Selection 5. Language -Language skills are critical for some expatriate positions but lesser in others -Communication skills rather than specific language skills are important -A Price –Waterhouse survey places language as the third most important selection criterion 6. Country Requirements -Companies require to provide the unavailability of HCNs before sending expatriates -Work permits & entry visas -Spouse as a dependent in the host country creates an issue in expatriate selection

Staffing & Selection

1.Inability to adjust to a Foreign Culture -Spouse/partner dissatisfaction -difficulties with family adjustment in the new location -difficulties associated with different management styles -culture & language difficulties -issues associated with the spouse’s career development 2. The process of adjustment

Staffing & Selection 3. Length of Assignment -Length of Assignment does contribute to adjustment & performance of expatriates -Longer duration of assignment allows the expatriate more time to adjust to the foreign situation -Company policy to expat adjustment 4. Willingness to Move -Supportive family facilitates expatriate movement -British are far more internationally mobile than the US managers 5. Work-Environment Related Factors -Job autonomy -Org. Support for the expatriate -Lack of Challenge at work

6. The Employment Relationship -The nature of the employment relationship 1.Relational: broad, open-ended and long- term obligations 2.Transactional: specific short-term monetized obligations -The condition of the relationship 1.Intact: when employee considers there has been fair treatment, reciprocal trust 2.Violated: provoked by belief organization has not fulfilled its obligations

6. The Employment Relationship Why Consider the Psychological Contract? 1. Nature, location and duration of an international assignment may provoke intense, individual reactions to perceived violations 2. Expatriates tend to have broad, elaborate, employment relationships with greater emphasis on relational nature 3. Expectations and promises underpin this relationship -Likelihood of exit

oTraditional Definition: Premature return of an expatriate oCould be defined in terms of -Poor Quality of Performance in Foreign Assignment -Personal Dissatisfaction with experience (by expatriate or family) -Lack of adjustment to local conditions -No acceptance by local nationals -Inability to identify/or train a local successor Staffing & Selection

oDirect costs of failure: airfares, associated relocation expenses, and salary and training – Varies according to level of position concerned – Country of destination – Exchange rates – Whether ‘failed’ manager is replaced by another expatriate Staffing & Selection

oIndirect costs (invisible) – Damaged relationships with key stakeholders in the foreign location – Negative effects on local staff – Negative effects on expatriate concerned – Family relationships may be affected Staffing & Selection

1.Dual Working Couple Challenge Solutions to the Dual Working Couple Challenge Alternative assignment arrangements – Short-term – Commuter – Other (eg. unaccompanied, virtual) Family-friendly policies – Inter-company networking – Job-hunting assistance (fact finding trip) – Intra-company employment Staffing & Selection

oAre Female Expatriates any Different? -Barriers to Women taking up International Assignments External BarriersSelf Imposed Barriers HR Managers reluctant to select female candidates Culturally tough locations or regions preclude female expatriates Those selecting expatriates have stereotypes in their minds that influence decisions Some women have limited willingness to relocate The dual-career couple Women are often a barrier to their own careers by behaving according to gender based role models