This document provides an overview of key topics in international human resource management (IHRM) including approaches to staffing foreign operations, reasons for international assignments, types of international assignments, and the roles of expatriates and non-expatriates in supporting international business activities. It also discusses calculating return on investment for international assignments and the various roles of the corporate HR function in managing international operations.
2. Chapter Learning Objectives
After reading this chapter, you should be able to:
• discuss issues relating to the various approaches to
staffing foreign operations
• provide reasons for using international assignments:
filling positions, management development and
organizational development
• define the various types of international assignments:
short term, extended and longer term, along with non-
standard arrangements: commuter, rotator, contractual
and virtual
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3. Chapter Learning Objectives
• describe the role of expatriates and non-expatriates in
supporting international business activities
• outline the possibilities on a return on investment of
international assignments
• define the role of the corporate HR function
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4. Opening Vignette
Help!
• IHRM plays a leading role in the staffing of international
operations by supporting and guiding managers involved
in assignments in foreign companies.
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5. Opening Vignette
• Discuss some of the areas and aspects that should have
been managed by his company’s HRM team.
• How could the HR function help its Dutch employee?
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6. Terms
Expatriate roles: Assignments: short-term
agent of direct control extended
agent of socialization traditional
ROI approach commuter
language node rotational
network builder contractual
boundary spanner virtual
inpatriates Approaches to staffing:
expatriates ethnocentric polycentric
flexpatriat geocentric regiocentric
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IHRM Chapter 4 6
7. Approaches to Staffing
• ethnocentric
• polycentric
• geocentric
• regiocentric
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8. Ethnocentric
• few foreign subsidiaries have any autonomy and strategic
decisions are made at headquarters
• key positions in domestic and foreign operations are held
by headquarters’ personnel
• subsidiaries are managed by staff from the home country
(PCNs).
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10. Cost of Employing
Expatriates (IHRM Today 4.3)
• the costs of sending this manager on a international
assignment are nearly a million dollars, compared to the
approximately $300,000 it would cost to employ a U.K.
– based manager.
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12. Polycentrism
• subsidiary is treated as a distinct national entity with
decision‑making autonomy
• subsidiaries are managed by local nationals (HCNs)
• HCNs are seldom promoted to positions at headquarters
• PCNs are rarely transferred to foreign subsidiary
operations
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14. Geocentrism
• a global approach to its operations, recognizing that each
part (subsidiaries and headquarters) makes a unique
contribution
• world wide integrated business; nationality is ignored in
favour of ability.
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15. Advantages of Geocentrism
• develops international executive teams and internal pools
of labour
• overcomes federation drawback
• supports cooperation and resource sharing across units
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16. Disadvantages of
Geocentrism
• host governments may utilize immigration controls in
order to force HCN employment
• companies required to provide extensive documentation
• increased training and relocation costs
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17. Disadvantages of
Geocentrism
• compensation structure with standardized international
base pay
• large numbers of PCNs, TCNs, and HCNs need to be
sent abroad
• requires longer lead time and centralized control of the
staffing process
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18. Regiocentrism
• reflects the geographic strategy and structure of the
MNE
• it utilizes a wider pool of managers but in a limited way
• staff may move outside their countries but only within
the particular geographic region
• regional managers may not be promoted to headquarters
positions but enjoy a degree of regional autonomy
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19. Advantages of Regiocentrism
• interaction between executives
• sensitivity to local conditions (staffed by HCNs)
• way to gradually move from a purely ethnocentric or
polycentric approach to a geocentric approach
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20. Disadvantages of
Regiocentrism
• can produce federalism at a regional rather than a country
basis
• improves career prospects at the national levels
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21. A Philosophy Towards
Staffing
The internal and external contingencies facing an
internationalizing MNE influence its staffing
practices
• managerial attitude
• degree of culture differences
• local government requirements
• foreign market
• maturity of operation
• organizational needs
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23. Transferring Staff for International
Business Activities
HRM implications
• reasons for using international assignments
• types of international assignments
• role of expatriates and non-expatriates
• role of inpatriates
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24. Reasons for International
Assignments
• position filling
• management development
• organization development
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25. Types of International
Assignments
Short term up to 3months
Extended up to 1year
Long term (traditional expatriate assignment) 1 to 5 years
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26. Short-term Assignments
• take up to three months
• usually for troubleshooting, project supervision, or a
stopgap measure
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27. Extended Assignments
• up to one year
• may involve similar activities as that for short term
assignments
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28. Long-term Assignments
• traditional expatriate assignment varying from one to five
years
• involving a clearly defined role in the receiving operation
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30. Non-standard
International Assignments
Commuter go home every one to two weeks
Rotational commute for set period followed
by in home country
Contractual specific skills employees hired for
6 to 12 months on specific projects
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31. Non-standard
International Assignments
Virtual
• employee manages international responsibilities from
home country base
• relies on communications technologies such as
telephone, email or video conferences
• frequent visits to the host country
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32. Virtual Assignments
Advantages
• overcoming high costs of international assignments
• fills shortage of mobile staff prepared to accept longer
term postings
Disadvantages
• stress resulting from intensive travel commitments
• role conflict, dual allegiance, and identification issues
• interpersonal and work relationships
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33. The Roles of an Expatriate (Figure 4.2)
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34. Agent of Direct Control
• subsidiary compliance through direct supervision
• enables strategic objectives for local operations to be
achieved
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35. Agent of Socialization
• the transfer of shared values and beliefs; related to the use
of corporate culture as an informal control mechanism
• assist in knowledge sharing and competence transfer, and
adoption of common work practices
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36. Network Builders
• develop social capital: fostering interpersonal linkages
that can be used for informal control and communication
purposes
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37. Boundary Spanners
• collect host country information and act as representatives
of their firms in the host country
• can influence agents
• bridge internal and external organizational contexts
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38. Language Nodes
• many MNEs operate through language standardization –
or corporate language, usually English.
• employees competent in other languages may be the
person in which other country representatives preferred to
conduct queries from the MNE.
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39. Transfer of Competence and
Knowledge
• elements from all roles
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40. The Role of Non-Expatriates
• travel internationally yet do not relocate to another
country
• a large proportion of their role involves constant
international visits to foreign markets, subsidiary units,
international projects
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41. Stress Factors
• the international component of their work is performed
within the context of their ‘normal’ duties
• a high level of stress involved for those whose job
responsibilities contain a large proportion of international
business travel
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42. Stress Factors
• home and family
• work arrangements
• travel logistics
• health concerns
• host culture issues
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43. The Role of Inpatriates
• international assignments of HCNs or TCNs from a
foreign location to the MNE headquarters
• “linking pins” between the different organizational units
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44. Expatriate ROI
• a calculation in which the financial and non-financial
benefits to the MNC are compared to the financial and
non-financial costs of the international assignment
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45. ROI Indicators for Calculating
International Assignment (Figure 4-3)
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46. 4-Steps to Calculate
Expatriate ROI
• identify financial and non-financial costs and benefits.
• link the costs and benefits to the purpose of the long-term
assignment.
• identify the appropriate antecedents from a system’s
perspective.
• conduct the calculation at an appropriate time within the
context of the assignment’s purpose.
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47. Various Roles of Corporate
HR (Table4-1)
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IHRM Chapter 4 47
48. Discussion Questions
1. Outline the main characteristics of the four approaches to
international staffing.
2. Which factors determine the choice of a staffing approach?
Would a MNE choose the same staffing approach
worldwide? Place your arguments in the context of the
model outlining determinants of staffing choices.
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IHRM Chapter 4 48
49. Discussion Questions
3. What are the reasons for using international assignments?
4. What is the role of inpatriates? Do inpatriates guarantee a
geocentric staffing policy?
5. Why is it important to measure return on investment of
international assignments? Which indicators can be used?
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IHRM Chapter 4 49
50. Discussion Questions
6. As a newly appointed Project Manager of a research team,
you consider that you will be able to manage the project
virtually from your office in London, even though the other
six members are located in Munich. This will solve your
personal dilemma as your family does not want to be
relocated. The project has a six-month deadline. What
factors should you need to consider in order to make this
virtual assignment effective?
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IHRM Chapter 4 50
51. Case: RBC Dexia Investor
Services
Questions PART A
1. When two international companies like RBC and Dexia
partner up in a joint venture many positions are double
occupied. From a HR perspective how would you
approach this problem? What are your options to solve
this problem?
2. What are some of the other key HR challenges in an
international partnership such as Canada’s RBC and
Belgium/Luxembourg Dexia?
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52. Case: RBC Dexia Investor
Services
Questions PART A
3. What are your options to fill the 300 additionally
required jobs in Luxembourg?
4. What kind of impression could the sudden and
justification lacking announcement of changes at the
top management level have on employees?
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53. Case: RBC Dexia Investor
Services
Questions PART B
1. Based on the message from this note what are the
consequences for employees wanting to move between
RBC to RBC Dexia?
2. With regard to service history, pensions and benefits,
what are the options for HRM to help employees
wanting to move from RBC to RBC Dexia?
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