IBUS 618 Dr. Yang Chapter 4 Recruiting and Selecting Staff for International Assignments

IBUS 618 Dr. Yang Chapter Objectives In Part I, we demonstrated how people play a central role in sustaining international operations. As international assignments are an important vehicle for staffing, it is critical that they are managed effectively, and the expatriates are supported so that performance outcomes are achieved.

IBUS 618 Dr. Yang Chapter Objectives (cont.) The focus of this chapter is on recruitment and selection activities in an international context. We will address the following issues: The myth of the global manager The debate surrounding expatriate failure Factors moderating intent to stay or leave the international assignment Selection criteria for international assignments Dual-career couples Gender issues The focus of this chapter is on recruitment and selection activities in an international context. We will address the following issues: The myth of the global manager The debate surrounding expatriate failure Factors moderating intent to stay or leave the international assignment Selection criteria for international assignments Dual-career couples Gender issues

IBUS 618 Dr. Yang The global manager Myth 1: There is a universal approach to management. Myth 2: People can acquire multicultural adaptability and behaviors. Myth 3: There are common characteristics shared by successful international managers. Myth 4: There are no impediments to mobility.

IBUS 618 Dr. Yang Current Expatriate Profile Category PCN (42%) HCN (16%) TCN (42%) Gender Age (Yrs) Marital status Male (82%) (60%) Married (65%) Female (18%) (17%) Single (26%) Partner (9%) Accompanied by Duration Location Primary reason Prior international experience Spouse (86%) 1-3 years (52%) Europe (35%) Fill a position 30% Children (59%) Short-term (9%) Asia-Pacific (24%) Source: based on data from global Relocation Trends: 2002 Survey Report, GMAC Global Relocation Services, National Foreign Trade Council and SHRM Global Forum, GMAC-GRS 2003.

IBUS 618 Dr. Yang Expatriate Failure Definition: Premature return of an expatriate Under-performance during an international assignment Retention upon completion

IBUS 618 Dr. Yang Recall Rate Percent Percent of Companies US Multinationals % 7% % 69 < European Multinationals % 3% < 5 59 Japanese Multinationals % 14% < 5 76 Expatriate Failure Rates

IBUS 618 Dr. Yang Reason for Expatriate Failure US Firms Inability of spouse to adjust Manager ’ s inability to adjust Other family problems Manager ’ s personal or emotional immaturity Inability to cope with larger overseas responsibilities US Firms Inability of spouse to adjust Manager ’ s inability to adjust Other family problems Manager ’ s personal or emotional immaturity Inability to cope with larger overseas responsibilities Japanese Firms  Inability to cope with larger overseas responsibilities  Difficulties with the new environment  Personal or emotional problems  Lack of technical competence  Inability of spouse to adjust Japanese Firms  Inability to cope with larger overseas responsibilities  Difficulties with the new environment  Personal or emotional problems  Lack of technical competence  Inability of spouse to adjust European Multinationals: Inability of spouse to adjust.

IBUS 618 Dr. Yang Costs of Expatriate Failure Direct costs: Airfares Associated relocation expenses Salary and benefits Training and development Averaged $250,000 per early return Direct costs: Airfares Associated relocation expenses Salary and benefits Training and development Averaged $250,000 per early return Costs vary according to: Level of position Country of destination Exchange rates Whether ‘failed’ manager is replaced by another expatriate Costs vary according to: Level of position Country of destination Exchange rates Whether ‘failed’ manager is replaced by another expatriate

IBUS 618 Dr. Yang Indirect Cost of Expatriate Failure Damaged relationships with key stakeholders in the foreign location Negative effects on local staff Poor labor relations Negative effects on expatriate concerned Family relationships may be affected Loss of market share

IBUS 618 Dr. Yang Factors Moderating Expatriate Performance Inability to adjust to the foreign culture Length of assignment Willingness to move Work-related factors Psychological contract/employment relationship

IBUS 618 Dr. Yang The Employment Relationship The nature of the employment relationship Relational: broad, open-ended and long-term obligations Transactional: specific short-term monetized obligations The condition of the relationship Intact: when employee considers there has been fair treatment, reciprocal trust Violated: provoked by belief organization has not fulfilled its obligations

IBUS 618 Dr. Yang The Dynamics of the Employment Relationship

IBUS 618 Dr. Yang Likelihood of Exit

IBUS 618 Dr. Yang International Assignments: Factors Moderating Performance

IBUS 618 Dr. Yang The Phases of Cultural Adjustment

IBUS 618 Dr. Yang The Phases of Adjustment The U-Curve is not normative The time period involved varies between individuals The U-Curve does not explain how and why people move through the various phases It may be more cyclical than a U-Curve Needs to consider repatriation

IBUS 618 Dr. Yang Organizational Commitment Affective component Employee’s attachment to, identification with and involvement in, the organization Continuance component Based on assessed costs associated with exiting the organization Normative component Employee’s feelings of obligation to remain

IBUS 618 Dr. Yang Why consider the psychological contract? Nature, location and duration of an international assignment may provoke intense, individual reactions to perceived violations Expatriates tend to have broad, elaborate, employment relationships with greater emphasis on relational nature Expectations and promises underpin this relationship

IBUS 618 Dr. Yang Selection Criteria Technical ability Cross-cultural suitability Family requirements Country-cultural requirements MNE requirements Language

IBUS 618 Dr. Yang Using Traits and Personality Tests to Predict Expatriate Success Although some tests may be useful in suggesting potential problems, there may be little correlation between test scores and performance Most of the tests have been devised in the United States, thus culture-bound In some countries, there is controversy about the use of psychological tests ( different pattern of usage across countries) Use of personality traits to predict intercultural competence is complicated by the fact that personality traits are not defined and evaluated in similar way in different cultures Although some tests may be useful in suggesting potential problems, there may be little correlation between test scores and performance Most of the tests have been devised in the United States, thus culture-bound In some countries, there is controversy about the use of psychological tests ( different pattern of usage across countries) Use of personality traits to predict intercultural competence is complicated by the fact that personality traits are not defined and evaluated in similar way in different cultures

IBUS 618 Dr. Yang Factors in Expatriate Selection

IBUS 618 Dr. Yang Mendenhall and Oddou’s Model Self-oriented dimension Perceptual dimension Others-oriented dimension Cultural-toughness dimension

IBUS 618 Dr. Yang Harris and Brewster’s Selection Typology FormalInformal Open Clearly defined criteria Clearly defined measures Training for selectors Open advertising of vacancy (internal/external) Panel discussions Less defined criteria Less defined measures Limited training for selectors Open advertising of vacancy Recommendations No panel discussions Closed Clearly defined criteria Clearly defined measures Training for selectors Panel discussions Nominations only (networking/reputation) Selector’s individual preferences determine selection criteria and measures No panel discussions Nominations only (networking/reputation)

IBUS 618 Dr. Yang Solutions to the Dual-career Challenge Alternative assignment arrangements Short-term Commuter Other (e.g. unaccompanied, business travel, virtual assignments) Family-friendly policies Inter-company networking Job-hunting assistance Intra-company employment On-assignment career support

IBUS 618 Dr. Yang Barriers to Females Taking International Assignments External BarrierSelf-established 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.

IBUS 618 Dr. Yang Equal Employment Opportunity Issues Cultural Variations Law and enforcement Social values Corporate practices The United States EEOA within the country International approach

IBUS 618 Dr. Yang Chapter Summary Four myths related to the concept of a global manager The debate surrounding the definition and magnitude of expatriate failure. (cont.) This chapter has addressed key issues affecting recruitment and selection for international assignments. We have covered:

IBUS 618 Dr. Yang Chapter Summary (cont.) Cultural adjustment and other moderating factors affecting expatriate intent to stay and performance. Individual and situational factors to be considered in the selection decision. Evaluation of the common criteria used revealed the difficulty of selecting the right candidate for an international assignment and the importance of including family considerations in the selection process. (cont.)

IBUS 618 Dr. Yang Chapter Summary (cont.) Dual-career couples as a barrier to staff mobility, and the techniques that multinationals are utilizing to overcome this constraint. Female expatriates and whether they face different issues to their male counterparts. It is clear that, while our appreciation of the issues surrounding expatriate recruitment and selection has deepened in the past 20 years, much remains to be explored. The field is dominated by US research into predominantly US samples of expatriates, although there has been an upsurge in interest from European academics and practitioners. It is clear that, while our appreciation of the issues surrounding expatriate recruitment and selection has deepened in the past 20 years, much remains to be explored. The field is dominated by US research into predominantly US samples of expatriates, although there has been an upsurge in interest from European academics and practitioners.

IBUS 618 Dr. Yang Chapter Summary It is also apparent that staff selection remains critical. Finding the right people to fill positions, particularly key managers – whether PCN, TCN or HCN – can determine international expansion. However, effective recruitment and selection are only the first step. We will explore in the next chapter that maintaining and retaining productive staff are equally important. It is also apparent that staff selection remains critical. Finding the right people to fill positions, particularly key managers – whether PCN, TCN or HCN – can determine international expansion. However, effective recruitment and selection are only the first step. We will explore in the next chapter that maintaining and retaining productive staff are equally important.

IBUS 618 Dr. Yang Chapter Summary Corporate philosophy on recruiting and selection Selection criteria and issues of concern Local and home countries’ policies on foreign labor Variations in national labor law and labor markets Inter-company networking Intra-company arrangement Career assistance programs Training and continuous adaptation Corporate philosophy on recruiting and selection Selection criteria and issues of concern Local and home countries’ policies on foreign labor Variations in national labor law and labor markets Inter-company networking Intra-company arrangement Career assistance programs Training and continuous adaptation

IBUS 618 Dr. Yang Chapter Summary (cont.)  Will the factors affecting the selection decision be similar for multinationals emerging from countries such as China and India?  If more multinationals are to encourage subsidiary staff to consider international assignments as part of an intra-organizational network approach to management, we will need further understanding of how valid the issues discussed in this chapter are for all categories of staff from different country locations.  Another area that remains ignored is the selection of non- expatriates, that is, the international business travelers we discussed in Chapter 3. In our survey of current literature, there is a paucity of recognition of this group.  (cont.)  Will the factors affecting the selection decision be similar for multinationals emerging from countries such as China and India?  If more multinationals are to encourage subsidiary staff to consider international assignments as part of an intra-organizational network approach to management, we will need further understanding of how valid the issues discussed in this chapter are for all categories of staff from different country locations.  Another area that remains ignored is the selection of non- expatriates, that is, the international business travelers we discussed in Chapter 3. In our survey of current literature, there is a paucity of recognition of this group.  (cont.)

IBUS 618 Dr. Yang Chapter Summary (cont.) The various consulting firm surveys conducted into relocation trends in 2002 that we draw on in this chapter indicate that more multinationals are resorting to replacing traditional assignments with business travel as a way of overcoming staff immobility. Likewise, there is a need for further work into the performance–selection link surrounding non-standard assignments, including commuter and virtual assignments.