1. Developing a Global Management Cadre
© 2010 Pearson Prentice Hall

2. Opening Profile: The Expat Life
What is it like to take an assignment abroad?
Would you like to be an “expat” (expatriate)?
Is it an adventure or a hardship?
Experiences of those who have done a stint abroad are mixed.
Experiences vary by job type, and especially by location.
Most companies with global business transactions want their top employees to have overseas experience.
At Procter & Gamble, 39 of the 44 global officers have had an international assignment and 22 were born outside the U.S.
In many circumstances, the adventure which started out with many concerns turns out to be one that the expats and their families do not want to end. According to the GMAC Global Relocation survey, 26% of expats opt to continue their overseas assignments when the original term ends.
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3. Develop effective global management teams.
Essentials of IHRM
Maximize long-term retention and use of international cadre through career management to develop a top-management team with global experience.
Develop effective global management teams.
Understand value, and promote the role of women in international management to maximize those underutilized resources.
Work with the host-country labor relations systems to help implementation and employee productivity.
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4. Expatriate Career Management
Preparation, adaptation, and repatriation
The role of the expatriate spouse
Expatriate retention
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5. Preparation, Adaptation, and Repatriation
Reintegration is difficult
Expatriates are often “out of sight, out of mind”
Feelings of alienation from “home”
Reverse culture shock occurs because
Means fewer will be willing to take assignments
Poor management of expatriates
The ability to develop a global management team depends largely on the success of expatriates’ assignments, which in turn depend on the ability to manage transitions for the expatriate and accompanying family members. Effective management of a company’s global cadre does not end with the overseas assignment. It ends with successful repatriation. Proactive management should begin with the end of the current assignment in mind. Unfortunately, many companies do little to minimize the effects of reverse culture shock or plan for repatriation once an assignment is over.
It is unsurprising, then, that US employees commonly see overseas assignments a negative career moves. If managers lose out on promotion opportunities while overseas, few will be willing to take foreign assignments.
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6. Elements of Successful Repatriation Programs
Mentor programs
Career planning and guidance units
A system for maintaining contact with expatriates
Companies need to make the foreign assignment and reintegration process positive by using careful career planning, providing support to those overseas, and using the increased experience and skills of returnees to the benefit of the home office. Research by Tung indicates that successful repatriation programs should use one or more of the following practices:
A mentor program to monitor the expatriate’s career path while abroad and upon repatriation.
As an alternative to the mentor program, the establishment of a special organizational unit for the purposes of career planning and continuing guidance for the expatriate.
A system of supplying information and maintaining contact with the expatriate so that he or she may continue to feel a part of the home organization.
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7. The Role of Expatriate Spouse
Employment status
60 percent of expatriate spouses are employed before the assignment, but only 21 percent are employed during the assignment.
Spouse adjustment more likely when:
The firm seeks the spouse’s opinion.
The spouse initiates predeparture training.
Often the spouse of an expatriate also is a corporate fast-tracker, but few companies effectively address the needs of the spouse—as evidenced by this statistic from the 2005 Global Relocation Trends Survey. Yet, increasingly, if the spouse cannot find a position in the assignment location, the expatriate may turn down the assignment. It also is estimated that in 2000 about 25% of accompanying spouses were male.
Research suggests adjustment by spouses is more likely (1) when firms seek the spouse’s opinion about the international assignment and the expected standard of living and (2) when the spouse initiates his or her own predeparture training.
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8. The Expatriate Transition Process
Exit from the home country
Entry to the host country
Entry transition
Adjustment (adaptation)
Exit transition
Entry back to the home country
Adjustment
The overall transition process experienced by a company’s international management cadre over time comprises three phases of transition and adjustment that must be managed. This first phase is exit from the home country, the success of which is largely determined by the quality of preparation the expatriate has received. The second phase is entry into the host culture, which is also comprised of entry, adjustment, and exit. The success of this phase depends largely on monitoring and support. The final phase is reentry into the home country or entry into a new host country, in which the level of reverse culture shock and the ease of re-acculturation will depend on the previous stages of preparation and support.
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9. Expatriates: “Handle with Care”?
Expatriates are highly marketable and receive more attractive offers from other employers.
Overseas compensation packages are more generous than those at home.
Expatriates feel unappreciated at home and on assignment.
No one can better look out for one’s interests than oneself. Expatriates must ask themselves and their superiors what role each overseas stint will play in career advancement and what proactive role each will play in one’s own career. However, unless the company is effective at managing the careers of successful expatriates, it may lose valuable employees. Carefully managing the careers of expatriates can help a company retain people with increasing global experience and skills. The Global Relocation Trends Survey finds several reasons for high expatriate turnover rates:
Expatriates are more marketable and receive more attractive offers from other employers.
Expatriates find their compensation packages on overseas assignments are more generous than at home and go from one company to another to take advantage of that.
Expatriates feel unappreciated and dissatisfied both during and after the assignment and leave the company.
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10. The Role of Repatriation in Developing a Global Cadre
Successful expatriates acquire skills:
Managerial skills
Tolerance for ambiguity
Multiple perspectives
Ability to work with and manage others
Ability to do business overseas
Leading companies
Booz, Allen, Hamilton’s KOL intranet
Best practices:
Focus on knowledge creation/leadership development
Use assignees with high technical and cross-cultural skills
Have a deliberate repatriation process
Successful returning expatriates have developed knowledge and skills that are highly useful to their companies. For instance, Adler suggests skills include:
Managerial skills, not technical skills: learning how to deal with a wide range of people, to adapt to their cultures through compromise, and not to be a dictator.
Tolerance for ambiguity: making decisions with less information and more uncertainty about the process and the outcome.
Ability to work with and manage others: learning patience and tolerance—realizing that managers abroad are in the minority among local people; learning to communicate more with others and empathize with them.
In addition, expatriates learn how to do business overseas and about new technology, local marketing, and competitive information.
Companies must position themselves to benefit from the enhanced knowledge expatriate managers develop. If a company cannot retain good returning managers, then its potential shared knowledge is not only lost but also conveyed to other companies that hire them. Some companies are learning to use technology to utilize shared knowledge to develop their global management cadre, to better serve customers, and store their managers’ knowledge and expertise. For example, Booz, Allen and Hamilton has instituted a Knowledge On-Line (KOL) intranet as a means to enhance knowledge sharing among employees and improve client services. The intranet links islands of information separated by geography and platform-specific applications, thereby enabling 2000 consultants to collect and share their best thoughts and expertise.
Black and Gregerson identified several best practices for retaining expatriate talent when making international assignments. These include (1) focusing on knowledge creation and global leadership development, (2) assigning overseas posts to people whose technical skills are matched or exceeded by their cross-cultural abilities, and (3) ending expatriate assignments with a deliberate repatriation process. Thus, a successful repatriate process begins before the assignment. Farsighted policies, along with selection criteria based more on the adaptability of the manager and his or her family than on technical skills, pay off.
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11. Global Management Teams: The Effects of Multicultural Teams
Domestic:
Mostly internal operations
International:
Relationships among buyers, sellers, and other intermediaries
Multinational:
Internal, across culturally diverse managers and technical people
Global management teams are collections of managers in or from several countries who must rely on group collaboration if each member is to experience optimum success and goal achievement. The role and importance of international teams increase as the firm progresses in its scope of international activity. In domestic firms, the effects of multicultural teams are limited to internal operations and some external contacts. In international firms that export products and produce some goods overseas, multicultural teams and cultural diversity play important roles between buyers, sellers, and others at the boundary of the organization. For multinational firms, the role again becomes internal, with teams consisting of culturally diverse managers and technical people who are located around the world and are also working together within subsidiaries.
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12. Operational Challenges for Global Virtual Teams
Virtual Teams’ Challenges
Geographic dispersal: the complexity of scheduling communications across multiple time zones, holidays, and so on
Cultural differences: variations in attitudes and expectations
Language and communication: translation difficulties, variations in accents, semantics, and so on
Technology: variations in availability, speed, acceptability, and so on
Virtual global teams represent a horizontal networked structure, with people around the world conducting meetings and exchanging information via the internet, enabling the organization to capitalize on 24-hour productivity. The advantages and cost savings of virtual teams are frequently offset by their challenges. For example, geographic dispersal can create complexity in scheduling teleconferences and videoconferences across different time zones. Dispersal also can make it difficult for members to develop trust, which is often best established in face-to-face interactions. Cultural differences, such as variations in attitudes toward risk taking, money, and scheduling, can create problems as well. Communication difficulties increase with language differences. These can be amplified because members cannot necessarily rely on nonverbal cues. Finally, challenges can arise when different members have access to different levels of technology.
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13. Virtual Teams’ Future Needs
How to lead a virtual team meeting
How to coach and mentor virtually
How to monitor team progress
How to use communication technologies
How to manage team boundaries
Rosen, Furst, and Blackburn conducted a study of 440 training and development professionals. The respondents indicated which training programs for virtual teems were most needed in the future. The full results are shown in Exhibit 10-4, but the top five needs are shown in this slide.
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14. Managing Transnational Teams
Tasks for Global Business Teams
Cultivating trust among members
Overcoming communication barriers
Aligning goals of individual team members
Obtaining clarity regarding team objectives
Ensuring that the team possesses necessary knowledge and skills
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15. Management Techniques to Deal with the Cross-Cultural Collaboration Challenges
Draw upon individual tolerance and self-control
Trial-and-error processes coupled with personal relationships
Setting up transnational cultures
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16. Management Focus: The Role of Women in International Management
Indra Nooyi—CEO, Pepsi
Soha Nashaat
Head of Barclays Bank, Middle East
Research continues to show that women are disproportionately underrepresented in expatriate assignments. Opportunities for indigenous female employees to move up the managerial ladder depend on the given culture. For example, in Japan the workplace traditionally has been male dominated, with a working woman representing a loss of face to her husband. Increased global competitiveness has brought some changes, with more than 60% of Japanese women now employed. However, as this slide illustrates, Japanese women still represent only 8.9% of managerial workers.
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17. Management Focus: The Role of Women in International Management
Women are increasingly making their way into the international management cadre.
Different opportunities for women may reflect the cultural expectations of the host countries.
In Spain and Italy, top boardrooms remain almost exclusively male.
Women occupy 22 percent of board seats in Norway and 20 percent in Sweden.
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18. Management Focus: The Role of Women in International Management
North American women working as expatriate managers in countries around the world showed that they are—for most part—successful.
Women and minorities represent a significant resource for overseas assignments—whether as expatriates or as host-country nationals.
American executives are reluctant to give women expatriate assignments because they assume the women will be subject to the same biases as at home, or they assume a lack of understanding and acceptance in particular countries. The latter assumption is questionable, however. Research by Adler shows that, first and foremost, foreigners are seen as foreigners. A woman who is a foreigner is not necessarily expected to act like a local woman. Adler recommends that businesses (1) avoid assuming female executives will fail because of the way they are received or because of problems experienced by female spouses, (2) avoid assuming that a woman will not want to go overseas, and (3) give female managers every chance to succeed by giving them titles, status, and recognition appropriate to the position.
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19. The Role of Women in International Management: Japan
By tradition women are hired primarily for clerical tasks and tea serving; they are known as “office ladies”.
Could expanding women’s roles help end Japan’s 13-year economic slump?
Women’s lack of participation may shave .6 percent off annual growth.
Average profits are higher in companies comprised of 40 to 50 percent women.
Population decline could cause huge labor shortages.
Women are often illegally dismissed for pregnancy.
Government officials complain declining birth rates are due to the over-education of women.
Women say the problem is lack of day care and very long working hours.
Japanese labor economists and others argue that Japan will struggle to compete economically as long as women are sidelined from the career track.
Evidence suggests Japan’s traditional attitude toward women in the workplace truly does have economic consequences.
Despite, recommendations by a governmental advisory panel to fill 30% of management positions with women by 2020, there is still a great deal of resistance to women in the workforce—both in the government and the population.
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20. Working Within Local Labor Relations Systems
The Impact of Unions on Business
Organized Labor Around the World
Convergence Versus Divergence in Labor Systems
Adapting to Local Industrial Relations systems
The NAFTA and Labor Relations in Mexico
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21. The Impact of Unions on Business
Labor Relations and Collective Bargaining
The process through which managers and workers determine their workplace relationship
Three Dimensions to Consider
The participation of labor in firm affairs
The role and impact of unions
Human resource policies
Labor Relations Constraints
Wage levels set by unions
Limits on the firm’s ability to vary employment levels
Limitations on the global integration of operations
The term labor relations refers to the process through which managers and workers determine their workplace relationships. The process may be through verbal agreement or through a union’s written labor contract, which has been reached through collective bargaining between workers and managers. The labor contract determines workers’ rights regarding pay, benefits, job duties, firing procedures, retirement, layoffs, etc.
The prevailing labor relations system in a country is important because it can constrain the strategic decisions and operational activities of a firm operating there. The three dimensions of labor-management relationships that the manager will consider are (1) the participation of labor in the affairs of the firm, especially as this affects performance and well-being; (2) the role and impact of unions in the relationship; and (3) specific human resource policies in terms of recruitment, training, and compensation.
Constraints include (1) wage levels that are set by union contract and leave the foreign firm little flexibility to be globally competitive, (2) limits on the ability of the foreign firm to vary employment levels when necessary, and (3) limitations on the global integration of operations of the foreign firm because of incompatibility and the potential for industrial conflict. As an example of these constraints, European businesses continue to be undermined by their poor labor relations and by inflexible regulations. As a result, businesses move jobs overseas to cut labor costs. In turn, unions refuse to grant any concessions in employment protection and benefits to keep jobs at home. The situation may be beginning to change some, though.
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22. Organized Labor Around the world
Union membership is in decline. CHINA????
Industrial, craft, conglomerate, and general unions
Labor unions must be understood within their given contextual environment.
The percentage of union membership in industrialized countries has declined over the last decade, particularly in Europe (though it does remain quite high overall, especially in Italy and the UK). There are several reasons for this decline: the increase in white-collar and service workers, a rising proportion of part-time and temporary workers, offshoring of jobs, and reduced belief in unions by younger workers.
Traditional union structures in Western industrialized societies have been industrial unions, representing all employees in a specific industry, and craft unions, based on certain occupational skills. More recently the structure has been conglomerate unions, which cut across industries, and general unions, which are open to most employees within a country. In the US, most unions are national and represent specific groups of workers. Alternatively, in Japan, it is common for a union to represent all workers in a company.
Labor relations systems across countries must be understood relative to their context—e.g., in terms of government regulation, economic factors, technological issues, and the influence of religious organizations. For example, collective bargaining in the US refers to negotiations between a labor union local and management, resulting in detailed agreements. In Europe, collective bargaining takes place between the employer’s organization and the trade union at the industry level. There are also differences in resulting agreements. In the US agreements are usually written and legally binding. In Britain, France, and Italy, agreements are often informal and verbal.
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23. Adapting to Local Industrial Relations Systems
Considerable pressure for MNCs to adapt their practices largely to the traditions of national industrial relations systems
MNCCs are subject to local and country regulations and practices.
Considerable gap exists between the labor laws and the enforcement of those laws—in particular in less developed countries
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