Chapter 16
Hiring and Managing
Employees
Chapter Preview
•
List the pros and cons of each staffing policy
•
Identify the key international recruitment and
selection issues
•
Explain international training and development
programs
•
Discuss the international compensation of
managers and workers
•
Describe labor-management relations globally
© Prentice Hall, 2008
International Business 4e
Chapter 16 - 2
International H.R.M.
Expatriates
Citizens of one country who are living
and working in another country
Recruitment and selection
Often modified
Training and development
Compensation
Labor relations
© Prentice Hall, 2008
International Business 4e
Chapter 16 - 3
Ethnocentric Staffing
Individuals from home country manage operations abroad
Advantages
+ Tight control over subsidiaries
+ Locally qualified people not always available
+ Re-create local operations in home-office image
+ Interests of home office may be better protected
– Relocations are expensive
Disadvantages
– Create “foreign” image for the business
© Prentice Hall, 2008
International Business 4e
Chapter 16 - 4
Polycentric Staffing
Individuals from host country manage operations abroad
Advantages
+ Responsibility on those knowing local business
+ Avoid expensive relocations from home nation
Disadvantages – Potentially lose control of subsidiary
© Prentice Hall, 2008
International Business 4e
Chapter 16 - 5
Geocentric Staffing
Best-qualified individuals, regardless of nationality,
manage operations abroad
Advantages
+ Develop global managers who can adjust
easily to any business environment
Disadvantages – These individuals command high salaries
© Prentice Hall, 2008
International Business 4e
Chapter 16 - 6
Tips for Small Businesses
Expanding internationally can severely
strain the resources of small firms:
Don’t entrust local operations solely to U.S. expatriates
Local contacts don’t guarantee contracts
Treat employees abroad as you want to be treated
Employ the Web in your talent search
© Prentice Hall, 2008
International Business 4e
Chapter 16 - 7
Human Resource Planning
Forecasting human resource needs and supply
Phase 1
Take inventory of
current human
resources
© Prentice Hall, 2008
Phase 2
Estimate firm’s
future human
resource needs
International Business 4e
Phase 3
Develop plan to
recruit and select
people for vacant
and anticipated
new positions
Chapter 16 - 8
Recruiting Human Resources
Process of identifying and attracting a qualified
pool of applicants for vacant positions
• Current employees
• Recent college graduates
• Local managerial talent
• Nonmanagerial workers
© Prentice Hall, 2008
International Business 4e
Chapter 16 - 9
Selecting Human Resources
Process of screening and hiring the best-qualified applicants
with the greatest performance potential
 Ability to bridge cultural
differences is key
 Expatriates must adapt
to new ways of life
 Cultural sensitivity raises
odds for success
© Prentice Hall, 2008
International Business 4e
Chapter 16 - 10
Culture Shock
Psychological process affecting people living abroad
that is characterized by homesickness, irritability,
confusion, aggravation, and depression
Stage I:
Thrilling experience
Stage II:
Downward slide
Stage III:
Recovery begins
Stage IV:
Embrace local culture
© Prentice Hall, 2008
International Business 4e
Chapter 16 - 11
Reverse Culture Shock
Psychological process
of readapting to one’s
home culture 
• Once-natural thoughts and
feelings now strange
• Can be more unsettling than
culture shock
• Many companies reabsorb
expatriates poorly
© Prentice Hall, 2008
Methods of
reducing its effects 
• Home-culture reorientation
programs
• Career-counseling sessions
• Career-development program
before posting abroad
International Business 4e
Chapter 16 - 12
Cultural Training Methods
© Prentice Hall, 2008
International Business 4e
Chapter 16 - 13
Compiling a Cultural Profile
Background
Notes
CultureGrams
Country
Studies Area
Handbooks
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International Business 4e
Chapter 16 - 14
Employee Compensation
Managerial employees
Cost-of-living
effects
Nonmanagerial workers
Greater cross-border
investment
Bonus and
tax incentives
Cultural and
social factors
© Prentice Hall, 2008
Greater labor mobility
in some markets
International Business 4e
Chapter 16 - 15
Labor-Management Relations
Positive or negative condition of relations between
a company’s management and its workers
• Rooted in local culture
• Often affected by
political movements
• Directly influences
workers’ lives
© Prentice Hall, 2008
International Business 4e
Chapter 16 - 16
Importance of Labor Unions
Can affect
selection
of a location
Can affect company
performance
in a market
Popularity of
emerging markets
in Asia
Union power
declining across
much of Europe
© Prentice Hall, 2008
International Business 4e
Chapter 16 - 17
International Labor Movements
International activities of unions are making progress in
improving treatment of workers and reducing child labor
But generating support
can be difficult because:
• Events in distant lands
difficult to comprehend
• Workers in different
nations often compete
© Prentice Hall, 2008
International Business 4e
Chapter 16 - 18
Chapter Review
•
List the pros and cons of each staffing policy
•
Identify the key international recruitment and
selection issues
•
Explain international training and development
programs
•
Discuss the international compensation of
managers and workers
•
Describe labor-management relations globally
© Prentice Hall, 2008
International Business 4e
Chapter 16 - 19