International staffing

International Staffing
Ligo Koshy, Assistant Professor, MACFAST

International Managers
• An expatriate is an employee who works and reside in a
foreign country
• Expatriate managers are mainly of two types
• PCNs (Parent country nationals)
• A national of a country of MNC’s headquarters
• TCNs (Third country nationals)
• A national of a country other than the MNCs home
country or the country of subsidiary
• Apart from the above another type of manager works for
MNCs as international managers
• HCNs( Host Country Nationals)
• A national of the country of subsidiaryLigo Koshy, Assistant Professor, MACFAST

Advantages and Disadvantages of using PCNs
Advantages:
• Familiarity with the
corporate office goals,
objectives, policies and
practices
• Easy organizational control
and coordination
• Has the required level of
competence
• Building a common
corporate culture
Disadvantages:
• Longer time for PCNs to adapt to host
countries
• Limited promotional opportunities for
HCNs
• Tendency of PCN’s to impose HQ style
• Excessive cost of selecting , training
and maintaining expatriate managers
and their families abroad
• Huge differences in the compensation
package between PCN’s and HCN’s
3Ligo Koshy, Assistant Professor, MACFAST

Advantages and Disadvantages of employing
TCNs
Advantages:
• Salary and benefits
requirements may be
lower than of PCN’s.
• TCNs may be better
informed than PCNs about
the host country
assignments
Disadvantages:
• Host country government may
resent hiring TCN’s
• TCNs may not want to return
to their own countries after
assignment
• Transfers must consider
possible national animosities.

Advantages and Disadvantages of using HCNs
Advantages:
• Familiarity with the socio economic
and with the business practices in
host country
• Lower cost incurred in hiring
compared to PCNs and TCNs
• Responds effectively to host
country’s demand for localization
• Language and other barriers are
eliminated
• Continuity of management
improves since HCNs stay longer in
positions
• Reduction in hiring costs and
elimination of work permit
requirements
Disadvantages:
• Difficulty in exercising control
over the subsidiary’s operations
• Communication difficulties in
dealing with corporate
headquarters.
• Lack of opportunities for PCNs to
gain international and cross-
cultural experience
• HCN’s have limited career
opportunity outside the
subsidiary

Why international staffing?
• Company motives
• Fill positions
• Management development
• Organisational Development
• Individual motives
• To gain job experience
• Better compensation
• Improved lifestyle abroad
• Possibility of advancement upon return

Approaches to Staffing Decisions of
MNCs
• The Ethnocentric Approach
• The polycentric Approach
• The Geocentric Approach
• The Regiocentric Approach

Ethnocentric approach
• Parent -country nationals (PCNs) hold the key positions.
• This means that few subsidiaries have any autonomy and the
strategic decisions are made at headquarters.
• Reasons for adopting this approach
• A perception that Qualified HCNs may not be available in
the subsidiary
• To ensure coordination and communication with the HQs

Ethnocentric Approach
Advantages and Disadvantages
Advantages:
• Building a common
corporate culture
• Easy organizational
control and
coordination
Disadvantages:
• Longer time for expatriate
managers to adapt to host
countries
• Limits the promotion
opportunities of HCNs
• Huge differences in the
compensation package
between PCN’s and HCN’s

Polycentric Approach
• Polycentric approach uses host-country
nationals(HCNs) to staff the subsidiary while parent
country nationals hold positions at headquarters.
• In this context, the multinational enterprise treats
each subsidiary as a distinct national entity with
some decision making autonomy.
• Local nationals who are seldom promoted to
positions at headquarters manage subsidiaries.

Polycentric Approach
Advantages:
• Familiarity with the socio economic,
political and legal environment and
with the business practices in host
country
• Lower cost incurred in hiring
compared to PCNs and TCNs
• Responds effectively to host
country’s demand for localization
• Language and other barriers are
eliminated
• Continuity of management
improves since HCNs stay longer in
positions
Disadvantages:
• Difficulty in exercising control
over the subsidiary’s
operations
• Communication difficulties in
dealing with corporate
headquarters.
• Lack of opportunities for PCNs
to gain international and cross-
cultural experience
• HCN’s have limited career
opportunity outside the
subsidiary

Geocentric approach
• The subsidiary operations are managed by the best
qualified individuals regardless of their nationality
• Subsidiaries may choose managers from the host
country, from the home country or from a third
country.

Geocentric Approach
Advantages:
• Facilitates the
development of an
international team
• Supports cooperation and
resource sharing across
units.
Disadvantages:
• Immigration controls and work
permits for the foreign manager
and his family
• High Training and relocation cost
• Devising an appropriate
compensation structure will be
complex
• More centralized control over
staffing and loss of autonomy by
the subsidiary in HRM issues 13Ligo Koshy, Assistant Professor, MACFAST

Regiocentric approach
• Managers are transferred within the same region
they work.
• In this approach, regional managers may not be
promoted to Headquarters positions but enjoy a
degree of regional autonomy in decision making.
• Eg: for global firm having a number of subsidiaries in
various regions like Asia-Pacific, European and U.S, a
manager working in Asia pacific region will be
moving within the same region only.

Regiocentric Approach
Advantages:
• More sensitivity to local
conditions
• Allows interaction
between executives
transferred to regional
headquarters from
subsidiaries in the region
and PCNs posted in the
regional headquarters.
• Paves the way for
adoption of a geocentric
approach
Disadvantages:
• Improves career opportunities at
the regional, but not international
level
• Factors such as political animosity
(India and Pakistan)between
regional countries and work permit
requirements must be taken into
consideration

Factors favouring PCNs or HCNs
A
Parent Country
Characteristics
Cultural distance between
parent unit and subsidiary ,
size of operations
B Industry Characteristics
Need for control, need to
customise
C
Subsidiary
Characteristics
Stages of subsidiary lifecycle,
Acquired or greenfield
project, performance ,
ownership pattern
D
Host Country
characteristics
Education level, political
conditions, cost of living

Linkage between Staffing and stages in Host units lifecycle of
MNC’s
Stage in Host Unit’s life
cycle
Staffing
Focus
Hiring
headcounts
Staffing
Approach
Role of Parent
MNC
Setting up the host unit
(0 to 9-12months)
Top and
Senior
management
positions
Normally 5-
20
Ethnocentric
/ Geocentric
approach
Closely and
carefully
monitored by the
parent MNC
Establishing the
technology team to
begin core operations
activities (6months –
1.5 years)
High quality
technical
competent
employees
20-200 Polycentric /
Ethnocentric
Role of Parent unit
is somewhat
reduced

Linkage between Staffing and stages in Host units lifecycle of
MNC’s
Stage in Host Unit’s life
cycle
Staffing
Focus
Hiring
headcounts
Staffing
Approach
Role of Parent
MNC
Full blown operations
of the host unit
(1.5 -3yrs)
Hiring
targets get
aggressive
Varies
between
200- 500
Polycentric
approach.
Role of parent
country is minimal.
Strong Operational
leadership at the unit
level while globally
consolidating with
Parent
Establishing
long term
liaisons with
educational
training
institutions
Between
500- 10000
depending
upon nature
of the
business.
Polycentric
or geocentric
Approach
Role of Parent unit
is at a strategic
level, taking
decisions to
optimize global
operating costs.

Transferring staff for
international business activities

Various Transfer Policies
• Four different transfer policies found in MNCs (Borg and
Harzing,1995)
• Extensive and planned transfer of personal
• PCNs, TCNs and HCNs are moved across subsidiaries
and HQ ( Geocentric Approach)
• The assignment of key managers abroad
• Trusted managers are assigned to key positions in
subsidiaries
• A policy of not having expatriate managers
• High cost, cultural issues
• Ad hoc policy
• A strategy without any proper planning and
guidelines

Types of International Assignments
• Short term up to 3 months
• Extended up to 1year
• Long term 1 to 5 years(traditional expatriate assignment)
Some non-standard assignments:
• Commuter commutes from home country on a weekly or
biweekly basis to the host country
• Rotational commute for set period followed by break in
home country
• Contractual specific skills employees hired for 6-12 months on
specific projects
• Virtual employee manages international responsibilities
from base in home country with the help of
information and communication technologies
IBUS 618 Dr. Yang 21Ligo Koshy, Assistant Professor, MACFAST

Roles of an Expatriate
22
Agent of direct control
Agent of socialising
Network builder
Transfer of competence and knowledge
Boundary spanner
Language node
Roles of an
Expatriate

Recruiting & Selecting for
International Assignments

International vs. domestic recruitment
• Staffing approach of MNC( ethnocentric, polycentric,
geocentric & Regiocentric)
• Constraints imposed by the host government(
immigration, work visa)
• Preference for internal recruitment
» To reduce selection risk
• Smaller number of external recruits

Recruitment Methods
• Using Head hunters
• Headhunter, an informal name for an employment
recruiter/Agency, sometimes referred to as executive
searcher .
• For top management positions
• Cross national advertising
• E-recruitment
• International graduate program
• Training program that last approximately 2 years and
aim at finding, training and developing university
graduates in to future managers
• The training is done in different countries shifting
trainees in different unitsLigo Koshy, Assistant Professor, MACFAST

Factors influencing Expatriate Selection
Technical /
Managerial
Competency
Cross-cultural
suitability/ Personal
Attributes
Family
Requirements
Country/ cultural
requirements
Language
MNE/ Company
Requirements
Individual
Situation

27
Mendenhall and Oddou Four Dimensional
Framework for expat selection :
Self Orientation
The degree to which the expatriate
expresses high self-esteem, self-
confidence and mental well being
Others Orientations
The degree to which the expatriate
is concerned about host national
co-workers and desire to affiliate
with them
Perceptual Dimension
The expertise the expatriate
possesses in accurately
understanding why host nationals
behave the way they do.
Cultural Toughness Dimension
The degree to which the culture of
the host country is incongruent
with that of the home country.
The evaluation of the candidates strength's and weakness on these 4
dimensions focuses on cross cultural ability thus complementing
technical ability

Selection Techniques
• Screening the Applicants background
• Testing the candidates ability to adapt to new culture
and environment
• Using psychological tests to investigate the overall
personality of manager
• Investigate the family situations of the potential
candidate
• Using assessment centre

Tasks and Exercises used in an assessment
center for Expatriate selection
Exercises/
Tasks
Tolerance for
ambiguity
Interpersonal
skills
Empathy Non-
judgementalism
Flexibility
Role-play
Questionnai
re
Group
Discussion
Presentation
Case study
Activities are aimed at measuring the the intercultural
competency of the candidate

Interviews for international
Recruitment- issues
• Stereotyping
• Cross cultural differences
• Non verbal bias

International staffing: Other issues
• Expatriate adjust process
• Expatriate failure
• Repatriation
• Inpatriation
• Recent trends in international staffing

Expatriate Adjustment Process
The Phases of Cultural Adjustment
Phase 1
Tourist
Phase 4
Adjustment
Phase 3
Pulling up
Phase 2
Crisis
Culture shock

Expatriate Failure
• Definition: Premature return of an expatriate
• Under-performance during an international
assignment
IBUS 618 Dr. YangLigo Koshy, Assistant Professor, MACFAST

Major Reasons for Expatriate Failure
Why Expatriates Fail Internationally?
Individuals unable to adjust to the culture
Individuals unable to cope with the demands of the job
Family Unable to adjust to the culture
Lack of Support from the Head office

Repatriation and Career issues

Knowledge & skills acquired from
international assignment
• Market specific knowledge
local systems (political, social, economic), language, customs
• Personal skills
inter-cultural knowledge, self-confidence, flexibility, tolerance
• Job-related management skills
communication, project management, problem-solving
• Network knowledge
meeting diverse people
• General management capacity
broader job responsibilities, exposure to other parts of the
organization

Repatriation
• Repatriation :
• The activity of bringing the expatriate back to the home
country.
• Re-entry presents new challenges:
• Expatriates may experience re-entry shock or reverse
cultural shock.
• Some exit the company.
• The multinational’s ability to retain current and
attract future expatriates is affected by the manner
in which it handles repatriation.

Factors influencing repatriate adjustment
Job-related factors
• Career anxiety
• Loss of visibility and isolation
• No post-assignment
guarantee of employment
• Work adjustment
• Re-entry position
• Devaluing experience
• Coping with new role demands
• Loss of status and pay
Social Factors
• Family Adjustment
• Social networks
• Effect on partner’s career
Influences
repatriate
adjustment

Repatriation Phases
1. Preparation:
• Developing plans for the future, and gathering information
about the new position
2. Physical relocation:
• Actual movement to the home country
3. Transition:
• Arrangements for accommodation, taking over
responsibilities etc.
4. Readjustment:
• Coping with changes (e.g., company changes, reverse
culture shock, career demands, etc.)

Repatriation strategies
Pre-expatriation
• Agreements outlining the type of positions
expatriates will be placed in upon repatriation
• Agreement about the duration of stay
overseas
• Keeping the post back at home till the
assignee returns
During
Assignment
• Continuous communication with the
expatriate to update them about the
developments in the home country
• Visit to headquarters when on vacation to
maintain visibility

Repatriation strategies
Preceding
repatriation
• Career guidance between 6 to12 months before the
end of assignment to reduce career anxiety
• Ensure that all elements of repatriation process are
transparent
After
repatriation
• Training seminars to help returnees to cope-up with
reverse culture shock
• Personalized financial & tax advice
• Reorientation programme about the changes in the
company policy, practices
• Visible & concrete expressions of repatriate’s value to
the firm

Inpatriation
• Involves the transfer of subsidiary manager to
the headquarters for specific period of time
• Helps in gaining knowledge about the
corporate work culture and build
communication network

Recent Trends in International staffing
• Offshoring
• Dual career couples
• Female expats

44
Recent trends in International staffing
Offshoring
• Offshoring is the relocation of a business process from
one country to another—typically an operational process,
such as manufacturing, or supporting processes, such as
accounting.
• Outsourcing country, usually in the developed economies,
stands to loose jobs to low cost and high skills countries.

45
Recent trends in International staffing
Managing Dual career couples
• Find a job for the trailing spouse/ job hunting assistance
• Commute/remote assignments/commuter marriages
• The spouse remain in the home country and the couple
works out ways to maintain relationship with the help of
organisation.
• The help from the employer is in the form of subsidized
telephone bills and air tickets.
• Intra-company employment
• Inter-firm networking
• On assignment career support

Female expats
• 18% of total Expat population constitute of females
• Causes for less number of female expats
• Stereotyping
– Less capabilities and skills to cope up with stress
• Host country attitudes
• Family Constraints
• Lack of motivation to work in foreign locations

International staffing

Recomendados

Recomendados

Mais conteúdo relacionado

Mais procurados

Mais procurados (20)

Semelhante a International staffing

Semelhante a International staffing (20)

Mais de koshyligo

Mais de koshyligo (6)

Último

Último (20)

International staffing