1. Human Resource Selection and Development Across Cultures
The specific objectives of this chapter are:
IDENTIFY the three basic sources that MNCs can tap when filling management vacancies in overseas operations in addition to options of subcontracting and outsourcing.
DESCRIBE the selection criteria and procedures used by the organization and individual managers when making final decisions.

2. Human Resource Selection and Development Across Cultures
The specific objectives of this chapter are:
DISCUSS the reasons why people return from overseas assignments, and present some of the strategies used to ensure a smooth transition back into the home-market operation.
DESCRIBE the training process, the most common reasons for training, and the types of training that often are provided.

3. Human Resource Selection and Development Across Cultures
The specific objectives of this chapter are:
EXPLAIN how cultural assimilators work and why they are so highly regarded.

4. Sources of Human Resources
MNCs can use four basic sources for filling overseas positions:
Home-country Nationals (Expatriates)
Expatriate managers who are citizens of the country where the multinational corporation is headquartered
Sometimes called headquarters nationals
Most common reason for using home-country nationals, or expatriates, is to get the overseas operation under way

5. Sources of Human Resources
MNCs can use four basic sources for filling overseas positions:
Home-country Nationals (Expatriates)
Local managers hired by the MNC
They are familiar with the culture
They know the language
They are less expensive than home-country personnel
Hiring them is good public relations
Host-country Nationals

6. Sources of Human Resources
MNCs can use four basic sources for filling overseas positions:
Home-country Nationals (Expatriates)
Managers who are citizens of countries other than the country in which the MNC is headquartered or the one in which the managers are assigned to work by the MNC
These people have the necessary expertise for the job
Host-country Nationals
Third-country Nationals

7. Sources of Human Resources
MNCs can use four basic sources for filling overseas positions:
Home-country Nationals (Expatriates)
Individuals from a host country or a third-country national who are assigned to work in the home country
The use of inpatriates recognizes the need for diversity at the home office
Use of inpats helps MNCs better develop their global core competencies
MNCs can subcontract or outsource to take advantage of lower human resource costs and increase flexibility
Host-country Nationals
Third-country Nationals
Inpatriates

8. Selection Criteria for International Assignments
General Criteria
Many criteria are used in selecting managers for overseas assignments including:
Adaptability
Independence
Self-reliance
Physical & emotional health
Age
Experience
Education
Knowledge of local language
Motivation
Support of spouse & children
Leadership

9. Rank of Criteria in Expatriate Selection
Adapted from Table 14–1: Rank of Criteria in Expatriate Selection

10. Selection Criteria for International Assignments
Adaptability to Cultural Change
Organizations examine a number of characteristics to determine whether an individual is sufficiently adaptable.
Work experiences with cultures other than one’s own
Previous overseas travel
Knowledge of foreign languages
Recent immigration background or heritage
Ability to integrate with different people, cultures, and types of business organizations

11. Selection Criteria for International Assignments
Adaptability to Cultural Change
Organizations examine a number of characteristics to determine whether an individual is sufficiently adaptable.
Ability to sense and accurately evaluate developments in the host country
Ability to solve problems within different frameworks and perspectives
Sensitivity to differences of culture, politics, religion, and ethics
Flexibility in managing operations on a continuous basis despite lack of assistance and gaps in information

12. Development of Satisfaction in Host Country
Note: Satisfaction scale: 1 = extremely low; 7 = extremely high.
Adapted from Figure 14–1: Development of Satisfaction in Host Country over Time

13. Selection Criteria for International Assignments
Adaptability to Cultural Change
Those who were best able to deal with their new situation had developed coping strategies characterized by sociocultural and psychological adjustments including:
Feeling comfortable that their work challenges can be met
Being able to adjust to their new living conditions
Learning how to interact well with host-country nationals outside of work
Feeling reasonably happy and being able to enjoy day-to-day activities

14. Activities That Are Important for Expatriate Spouses
Adapted from Table 14–2 :Activities That Are Important for Expatriate Spouses (scale: 1–5, 5 very important)

15. Activities That Are Important for Expatriate Spouses
Adapted from Table 14–2 :Activities That Are Important for Expatriate Spouses (scale: 1–5, 5 very important)

16. Selection Criteria for International Assignments
Other Considerations
Applicants better prepare themselves for international assignments by carrying out the following three phases:
Phase I
Focus on self-evaluation and general awareness include the following questions:
Is an international assignment really for me?
Does my spouse and family support the decision to go international?
Collect general information on available job opportunities

17. Selection Criteria for International Assignments
Other Considerations
Applicants better prepare themselves for international assignments by carrying out the following three phases:
Phase I
Conduct a technical skills assessment – Do I have the technical skills required for the job?
Start learning the language, customs, and etiquette of the region you will be posted
Develop an awareness of the culture and value systems of the geographic area
Inform your superior of your interest in the international assignment
Phase II

18. Selection Criteria for International Assignments
Other Considerations
Applicants better prepare themselves for international assignments by carrying out the following three phases:
Phase I
Attend training sessions provided by the company
Confer with colleagues who have had experience in the assigned region
Speak with expatriates and foreign nationals about the assigned country
Visit the host country with your spouse before the formally scheduled departure (if possible)
Phase II
Phase III

19. International Human Resource Selection Procedures
Anticipatory Adjustment
Training
Previous experience
In-country Adjustment
Individual’s ability to adjust effectively
Ability to maintain a positive outlook, interact well with host nationals, and to perceive and evaluate the host country’s cultural values and norms correctly
Clarity of expatriate’s role in the host management team
Expatriate’s adjustment to the organizational culture
Nonwork matters

20. The Relocation Transition Curve
Perceived Competence
Beginning of Transition
Time
6. Search for Meaning
Understanding reasons for success and failure. New models/personal theories created 7
7. Integration of New Skills and Behavior Acceptance of the new environment
3. Interest
A deeper exploration of the environment and a realization that it is fundamentally different from home
1. Unreality
The feeling that the relocation
is a dream 6 2 5
5. Experimentation and
Testing of New Approaches
Practice phase – trying to do things differently Feedback of results – success and failure 3
2. Fantasia
The feeling of enchantment and excitement in the new environment 1 4
4. Acceptance of Reality
“Letting go” of past comfortable attitudes and realizing you are a stranger in a strange land
Adapted from Figure 14–2: The Relocation Transition Curve

21. Common Elements of Compensation Packages
Compensating expatriates can be difficult because there are many variables to consider
Most compensation packages are designed around four common elements:
Allowances
Taxes
COMPENSATION PACKAGE
Base Salary
Benefits

22. Relative Cost of Living in Selected Cities
New York = 100
Tokyo
Oslo
Zurich
Hong Kong
Copenhagen
Paris
London
New York
Singapore
Stockholm
Seoul
Adapted from Figure 14–3: Relative Cost of Living in Selected Cities (New York = 100)

23. Relative Cost of Living in Selected Cities
New York = 100
Frankfurt
Beijing
Moscow
Rome
Tel Aviv
Mexico City
Toronto
Prague
Jakarta
Warsaw
Kuala Lumpur
Adapted from Figure 14–3: Relative Cost of Living in Selected Cities (New York = 100)

24. Relative Cost of Living in Selected Cities
New York = 100
Johannesburg
Bangkok
Cairo
Buenos Aires
Sao Paulo
Manila
Adapted from Figure 14–3: Relative Cost of Living in Selected Cities (New York = 100)

25. Common Elements of Compensation Packages
Base salary
Amount of money that an expatriate normally receives in the home country
Benefits
Should host-country legislation regarding termination of employment affect employee benefits entitlements?
Is the home or host country responsible for the expatriates’ social security benefits?
Should benefits be subject to the requirements of the home or host country?
Which country should pay for the benefits?
Should other benefits be used to offset any shortfall in coverage?
Should home-country benefits programs be available to local nationals?

26. Common Elements of Compensation Packages
Allowances
Cost-of-Living Allowance
Payment for differences between the home country and the overseas assignment.
Designed to provide the expatriate the same standard of living enjoyed in the home country
May cover a variety of expenses, including relocation, housing, education, and hardship
Incentives
A growing number of firms have replaced the ongoing premium for overseas assignments with a one-time, lump-sum premium

27. Common Elements of Compensation Packages
Taxes
Tax equalization
An expatriate may have two tax bills for the same pay
Host country
U.S. Internal Revenue Service
MNCs usually pay the extra tax burden

28. Employer Incentive Practices Around the World
Adapted from Table 14–3: Employer Incentive Practices Around the World

29. Tailoring the Compensation Packages
Balance-sheet approach
Ensure the expatriate does not lose money from the assignment
Complementary approach
Negotiate to work out an acceptable ad hoc arrangement
Localization
Pay the expatriate a salary comparable to local nationals
Lump sum method
give expatriate a lump sum of money
Cafeteria approach
Compensation package that gives the individual a series of options
Regional system
Set a compensation system for all expatriates who are assigned to a particular region

30. Individual and Host-Country Viewpoints
Individual desires
Why do individuals accept foreign assignments?
Greater demand for their talents abroad than at home
Host-country desires
Whom would it like to see put in managerial positions?
Accommodating the wishes of HCOs can be difficult:
They are highly ethnocentric in orientation
They want local managers to head subsidiaries
They set such high levels of expectation regarding the desired characteristics of expatriates that anyone sent by the MNC is unlikely to measure up

31. Quality of Life in Select Major Metropolises, 2002
Zurich
Vancouver
Vienna
Sydney
Copenhagen
Frankfurt
Stockholm
Amsterdam
Brussels
San Francisco
Tokyo
Paris
Singapore
New York = 100
Adapted from Figure 14–4: Quality of Life in Select Major Metropolises, 2002 (New York 100)

32. Quality of Life in Select Major Metropolises, 2002
Madrid
New York
London
Rome
Hong Kong
Buenos Aires
Kuala Lumpur
Johannesburg
Sao Paulo
Mexico City
Shanghai
Moscow
New Delhi
Belgrade
New York = 100
Adapted from Figure 14–4: Quality of Life in Select Major Metropolises, 2002 (New York 100)

33. Beliefs of Home-Country Organization Expatriates
Adapted from Table 14–4: Beliefs of Home-Country Organization Expats

34. Repatriation of Expatriates
Reasons for returning to home country
Most expatriates return home from overseas assignments when their formally agreed-on tour of duty is over
Some want their children educated in a home-country school
Some are not happy in their overseas assignment
Some return because they failed to do a good job
Readjustment problems
“Out of sight, out of mind” syndrome
Organizational changes
Technological advances
Adjusting to the new job back home

35. Effectiveness of Returning Expatriates
Time Back in Home Country
Low Neutral High
6 Years
5 Years
4 Years
3 Years
2 Years
1 Year
Adapted from Figure 14–5: Effectiveness of Returning Expatriates

36. Repatriation of Expatriates
Transition strategies
Repatriation Agreements
Firm agrees with individual how long she or he will be posted overseas and promises to give the individual, on return, a job that is mutually acceptable
Some of the main problems of repatriation include:
Adjusting to life back home
Facing a financial package that is not as good as that overseas
Having less autonomy in the stateside job than in the overseas position
Not receiving any career counseling from the company

37. Human Resource Management Practices in Select Countries
Adapted from Table 14–5: Human Resource Management Practices in Select Countries

38. Training in International Management
Four basic philosophic positions
Ethnocentric MNC
Stresses nationalism and often puts home-office people in charge of key international management positions

39. Training in International Management
Four basic philosophic positions
Ethnocentric MNC
Places local nationals in key positions and allows these managers to appoint and develop their own people
Polycentric MNC

40. Training in International Management
Four basic philosophic positions
Ethnocentric MNC
Relies on local managers from a particular geographic region to handle operations in and around that area
Polycentric MNC
Regiocentric MNC

41. Training in International Management
Four basic philosophic positions
Ethnocentric MNC
Seeks to integrate diverse regions of the world through a global approach to decision making
Polycentric MNC
Regiocentric MNC
Geocentric MNC

42. Training in International Management
Corporate Reasons for Training
Ethnocentrism
The belief that one’s own way of doing things is superior to that of others
Personal reasons
To train overseas managers to improve their ability to interact effectively with local people in general and with their personnel in particular
Increasing numbers of training programs address social topics – these programs also focus on dispelling myths and stereotypes by replacing them with facts about the culture

43. Model for the Development of Multinational Managers
Increasing effectiveness of expatriate and repatriated executives
Overall objective
Internal relations
External relations
Family relations
Relations with host government
Headquarters relations
Relations with home government
Feedback
Problem recognition
Review terms and conditions of assignment
Increase cultural awareness
Increase knowledge of the host country
Impart working knowledge of the foreign language
Increase conflict management skills
Minimize re-entry problems
Development objectives
Feedback
Assessment of development needs
Feedback
How much development?
Knowledge about cultural, political, economic, business, legal, and social factors of the host country
Awareness of the needs and expectations of the different parties interested in international operation
Awareness of the problems of family relations in the host country
Feedback
Development method
Orientation
Area study
Language instruction
Cross-cultural group
Predeparture training
Behavioral simulation
Orientation & training
Intergroup problem solving
Case method
Postarrival training
Re-entry training
Feedback
Intermediate result
Evaluation
Effectiveness of the expatriate executives
Desired result
Feedback
Re-entry training
Development method
Evaluation
Effectiveness of the repatriated executives
Desired result
Adapted from Figure 14–6: A Model for the Development of Multinational Managers

44. Model for the Development of Multinational Managers
Use your cursor to “Click” on the text box you want to view in a larger format.
Then use the following buttons to:
Return to the full model on slide #44
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You may also use your space bar or click (not on a button) to skip the “enlarged views” of this model and go on to the next topic
Adapted from Figure 14–6: A Model for the Development of Multinational Managers

45. Model for the Development of Multinational Managers
Overall Objective
Increasing effectiveness of expatriate and repatriated executives
Problem Recognition
Internal relations
External relations
Family relations
Relations with host government
Headquarters relations
Relations with home government
Return To Slide # 44
Development Objectives
BACK
NEXT
Adapted from Figure 14–6: A Model for the Development of Multinational Managers

46. Model for the Development of Multinational Managers
Development Objectives
Review terms and conditions of assignment
Increase cultural awareness
Increase knowledge of the host country
Impart working knowledge of the foreign language
Increase conflict management skills
Minimize re-entry problems
Assessment of Development Needs
How much development?
Return To Slide # 44
Development Method
BACK
NEXT
Adapted from Figure 14–6: A Model for the Development of Multinational Managers

47. Model for the Development of Multinational Managers
Development Method
Knowledge about cultural, political, economic, business, legal, and social factors of the host country
Awareness of the needs and expectations of the different parties interested in international operation
Awareness of the problems of family relations in the host country
Return To Slide # 44
Intermediate Result
BACK
NEXT
Adapted from Figure 14–6: A Model for the Development of Multinational Managers

48. Model for the Development of Multinational Managers
Intermediate Result
Predeparture training
Orientation
Area study
Language instruction
Cross-cultural group
Behavioral simulation
Case method
Postarrival training
Orientation & training
Intergroup problem solving
Re-entry training
Return To Slide # 44
Desired Result
BACK
NEXT
Adapted from Figure 14–6: A Model for the Development of Multinational Managers

49. Model for the Development of Multinational Managers
Desired Result
How much development?
Development Method
Re-entry training
Desired Result
Effectiveness of the repatriated executives
Return To Slide #44
Continue to the next topic
BACK
NEXT
Adapted from Figure 14–6: A Model for the Development of Multinational Managers

50. Cross-Cultural Training Programs
Major types of cross-cultural training programs
Environmental Briefings
Provide information about things such as geography, climate, housing, and schools

51. Cross-Cultural Training Programs
Major types of cross-cultural training programs
Environmental Briefings
Familiarize the individual with cultural institutions and value systems of the host country
Cultural Orientation

52. Cross-Cultural Training Programs
Major types of cross-cultural training programs
Environmental Briefings
Programmed learning techniques designed to expose members of one culture to some of the basic concepts, attitudes, role perceptions, customs, and values of another culture
Cultural Orientation
Cultural Assimilators

53. Cross-Cultural Training Programs
Major types of cross-cultural training programs
Environmental Briefings
Provide information about things such as geography, climate, housing, and schools
Cultural Orientation
Cultural Assimilators
Language Training

54. Cross-Cultural Training Programs
Major types of cross-cultural training programs
Environmental Briefings
Develop attitudinal flexibility
Cultural Orientation
Cultural Assimilators
Language Training
Sensitivity Training

55. Cross-Cultural Training Programs
Major types of cross-cultural training programs
Environmental Briefings
Send participant to the country of assignment to undergo some of the emotional stress of living and working with people from a different culture
Cultural Orientation
Cultural Assimilators
Language Training
Sensitivity Training
Field Experience

56. Cross-Cultural Training Programs
Steps in cross-cultural training programs
Local instructors and a translator observe the pilot training program or examine written training materials
Educational designer debriefs the observation with the translator, curriculum writer, and local instructors
The group examines the structure and sequence, ice breaker, and other materials to be used in the training
The group collectively identifies stories, metaphors, experiences, and examples in the culture that fit into the new training program
The educational designer and curriculum writer make necessary changes in training materials
Send participant to the country of assignment to undergo some of the emotional stress of living and working with people from a different culture

57. Cross-Cultural Training Programs
A variety of other approaches can be used to prepare managers for international assignments including:
Visits to the host country
Briefings by host-country managers
In-house management programs
Training in local negotiation techniques
Analysis of behavioral practices that have proven most effective
Send participant to the country of assignment to undergo some of the emotional stress of living and working with people from a different culture

58. Contingency Approach to Cross-Cultural Training
Length of Training
1–2 Months+
1–4 Weeks
Less than a Week
HIGH
LOW
Cross-Cultural Training Approach
Immersion Approach
Affective Approach
LOW Level of Rigor HIGH
Information Giving Approach
LOW MODERATE HIGH
Degree of Integration
Length of Stay
1 Month or less
2-12 Months
1-3 Years
Adapted from Figure 14–7: A Contingency Approach to Cross-Cultural Training

59. Types of Training Programs
Global Leadership Development
The Global Leadership Program (GLP)
A consortium of leading U.S., European, and Japanese firms, global faculty, and participating host countries
Provide an intensive international experience
Develop a global mindset
Instill cross-cultural competency
Provide an opportunity for global networking

60. Tichy Development Matrix
Deep Superficial
High Risk Low Risk
Long Time Little Time
Developing Fundamental Change
Problem-Solving Approaches
Developing New
Developing
Skills
Cognitive Understanding
Awareness
Depth of Change
Adapted from Figure 14–8: The Tichy Development Matrix
Deep High Risk Long Time
Superficial Low Risk Little Time
Required
Approach
Action
Learning
Individual Pair Team
Organization
Target of Change
Emerging
Trend
Current
Approach
Old Way

61. Case
BP’s Global Shift
1.Discuss John Browne’s leadership style. How would you characterize his approach to global leadership?
2.How much of an impact do you think BP’s marketing efforts will have on shareholder value?
3.Discuss the pros and cons of BP’s strategy in Russia, both short-term and long-term.
4.Do you think Browne’s initial plan to back the U.S. government’s proposal to open up the Arctic Refuge in Alaska was a mistake? If so, why?
5.Discuss the difficulties of simultaneously securing growth and promoting social responsibility for oil and gas firms. What are the major challenges?
6.Given BP’s huge commitment to re-branding itself as “socially responsible,” do you think customers will believe this message from a company that, by nature, contributes to environmental pollution? What other relationships/ associations could BP develop that would be more credible?
7.Do you view corporate social responsibility initiatives as a barrier to entry for new oil and gas concerns?