M A S T E R ' S T H E S I S
2010:032
Luleå University of Technology
D Master thesis
Industrial marketing
Department of Business Administration and Social Sciences
Division of Industrial marketing and e-commerce
2010:032 - ISSN: 1402-1552 - ISRN: LTU-DUPP--10/032--SE

This Master's thesis has been conducted for the program of International Business at Luleå
University of Technology during the late fall of 2009, it involved a lot of hard work but it has also been rewarding and interesting. This thesis has provided me with an opportunity to develop my skills within the area of international management in general and human resource management in particular and I hope that it can contribute to present research as well as serve as an inspiration for future studies. However, this thesis would not have become reality if it was not for a number of people who all contributed to make this study possible.
Foremost I would like to thank my supervisor, Professor Manucher Farhang at the
Department of Industrial Marketing and e-Commerce at Luleå University of Technology, he has through his guidance, advice and constant support, contributed to improve the quality of this thesis. Further, I would like to thank the respondents at the companies who participated in this study; Niklas Safi at IKEA, Nadim Penser at Atlas Copco, Eva Hansdotter at SKF, and
Holger Wiklund at Sandvik. Without their participation it would have been impossible to achieve the desired results. Finally, I would like to thank my beloved family and friends who has not only stood by for advice, support and encouragement during this intensive time, but foremost because they never stopped believing in me. Thank you.
Luleå University of Technology, January, 2010
Josefin Wäppling Bernárdzon

In today’s global economy, the area of International Human Resource Management has gained increased interest due to the significance of having ‘the right people at the right place’ in order to gain a sustainable competitive advantage. The purpose of this study is to investigate the staffing policies of Swedish MNCs for top managerial positions in foreign markets. This purpose has been addressed through a qualitative multiple-case study research where; (a) the factors influencing staffing decisions, (b) the actual selection process, and (c) the motives for MNCs to recruit locally in the foreign market as opposed to dispatching expatriates from home or a third country are investigated. The companies selected for this study are four Swedish MNCs with a long record of international activity; IKEA, Atlas
Copco, SKF, and Sandvik. The findings of this study show that; (a) the mindset of an organization determines which candidates are considered during the selection process and the reason for the companies to engage in international transfers of managers is connected to their overall international strategy, (b) the selection process is often strategic and formalized, and vacant positions are announced publicly, (c) applying the concept of “grandfather approval” – i.e. the recruiting manager’s superior has to approve the selection decision- can be an effective way to decrease the risk of subjectivity in the selection process, (d) MNCs consider the Nationality of the selected manager to depend on the selection requirements along with the amount of cultural differences between host- and parent country, (e) MNCs view the cost of sending an expatriate abroad as not of importance as long as it is results in “having the right person at the right place”.

I dagens globala samhälle så har International Human Resource Management fått ökad uppmärksamhet eftersom man har förstått värdet av att ha ”rätt person, på rätt plats” för att kunna nå långsiktiga konkurrensfördelar. Syftet med denna studie är att undersöka den bemanningspolicy som svenska multinationella företag tillämpar vid tillsättning av chefspositioner i utlandet. Detta syfte har bemötts genom en kvalitativ, flerfall studie forskning där; (a) faktorer som påverkar bemanningsbeslutet, (b) den faktiska urvalsprocessen, och (c) motiven för multinationella företag att rekrytera lokalt på den utländska marknaden jämfört med att skicka expatriater från hemlandet eller ett tredjeland, har undersökts. Fallföretagen i denna studie är fyra multinationella svenska företag som varit aktiva på den internationella marknaden länge; IKEA, Atlas Copco, SKF, och Sandvik.
Studiens resultat visar att; (a) organisationens internationella tankesätt styr vilka kandidater som tas i beaktning under urvalsprocessen och motivet bakom företagets internationella förflyttningar av chefer är kopplat till deras övergripande internationella strategi, (b) bemanningsprocessen är ofta strategisk och formaliserad, och lediga platser annonseras offentligt, (c) tillämpa ”farförälder principen” – dvs. den rekryteringsansvarigas chef måste godkänna bemanningsbeslutet - kan vara ett effektivt sätt att minska subjektiviteten i bemanningsprocessen, (d) multinationella företag anser att valda chefers nationalitet beror på urvalskraven och mängden kulturella skillnader mellan värd- och hemlandet och att (e) multinationella företag inte anser att kostnaden att skicka en expatriat utomlands är relevant så länge som de resulterar i ”rätt person, på rätt plats”.

1 INTRODUCTION ....................................................................................................................................................... 1
1.1
INTERNATIONALIZATION OF THE FIRM AND THE NEED FOR HUMAN COMPETENCE ................................................ 1
1.1.1
The International Manager ......................................................................................................................... 1
1.2
MANAGING PEOPLE ACROSS BORDERS ............................................................................................................... 2
1.3
STAFFING MNC S : P ROBLEM D ISCUSSION ................................................................................................................... 3
1.4
PURPOSE ............................................................................................................................................................ 5
1.5
OUTLINE OF THE THESIS ...................................................................................................................................... 5
2 LITERATURE REVIEW .............................................................................................................................................. 6
2.1
RESOURCE BASED VIEW VERSUS INSTITUTION BASED VIEW OF IHRM ................................................................... 6
2.2
FACTORS INFLUENCING STAFFING DECISIONS ..................................................................................................... 7
2.2.1
Mindset of the Organisation ....................................................................................................................... 7
2.2.2
Edström and Galbraith’s Framework for International Transfers ................................................................. 9
2.3
THE SELECTION PROCESS FOR INTERNATIONAL MANAGERS IN FOREIGN MARKETS ........................................... 11
2.3.1
Tung’s Framework for the Selection Process ........................................................................................... 12
2.3.2
Black, Gregersen, Mendenhall, & Stroh’s Strategic approach to the Selection Process ............................. 14
2.3.3
Selection Methods ................................................................................................................................... 18
2.3.4
Harris & Brewster’s Typology of international manager-selection systems ............................................... 19
2.4
MOTIVES FOR LOCAL RECRUITMENT AS OPPOSED TO DISPATCHING FROM HOME .............................................. 22
2.4.1
The Role Of The International Manager .................................................................................................... 22
2.4.2
Pcn-, Hcn- Or Tcn Managers? ................................................................................................................. 22
2.5
CONCEPTUAL FRAMEWORK ............................................................................................................................... 26
2.5.1
Conceptualization of RQ1 ........................................................................................................................ 26
2.5.2
Conceptualization of RQ2 ........................................................................................................................ 27
2.5.3
Conceptualization of RQ3 ........................................................................................................................ 28
2.5.4
Thesis Conceptual Framework ................................................................................................................ 29
3 METHODOLOGY ..................................................................................................................................................... 31
3.1
RESEARCH PURPOSE ......................................................................................................................................... 31
3.2
RESEARCH APPROACH ...................................................................................................................................... 31
3.3
RESEARCH STRATEGY ....................................................................................................................................... 32
3.4
SAMPLE SELECTION .......................................................................................................................................... 32
3.5
COLLECTING DATA ............................................................................................................................................ 33
3.6
ANALYSIS OF DATA ............................................................................................................................................ 33
3.7
QUALITY STANDARDS ........................................................................................................................................ 34
4 EMPIRICAL DATA PRESENTATION ........................................................................................................................ 36
4.1
CASE: IKEA ........................................................................................................................................................ 36
4.2
CASE: ATLAS COPCO ......................................................................................................................................... 39
4.3
CASE: SKF ......................................................................................................................................................... 42
4.4
CASE: SANDVIK ................................................................................................................................................. 46
5 ANALYSIS ............................................................................................................................................................. 50
5.1
WITHIN-CASE ANALYSIS OF IKEA ....................................................................................................................... 50
5.2
WITHIN-CASE ANALYSIS OF ATLAS COPCO ........................................................................................................ 52
5.3
WITHIN-CASE ANALYSIS OF SKF ........................................................................................................................ 53
5.4
WITHIN-CASE ANALYSIS OF SANDVIK ................................................................................................................. 55
5.5
CROSS-CASE ANALYSIS .................................................................................................................................... 56

6 DISCUSSIONS, CONCLUSIONS AND IMPLICATIONS ............................................................................................. 61
6.1
H OW CAN THE FACTORS INFLUENCING STAFFING DECISIONS FOR KEY MANAGERIAL POSITIONS FOR FOREIGN MARKETS BE DESCRIBED ?
61
6.2
H OW CAN THE MNC SELECTION PROCESS FOR TOP MANAGERIAL POSITIONS FOR FOREIGN MARKETS BE DESCRIBED ?
................... 62
6.3
H
OW CAN THE MOTIVES FOR HOST
-
COUNTRY LOCAL RECRUITMENT AS OPPOSED TO DISPATCHING OF EXPATRIATES FROM THE
MNC’
S
HOME COUNTRY OR THIRD COUNTRY BE DESCRIBED ?
............................................................................................................... 63
6.4
IMPLICATIONS AND RECOMMENDATIONS .......................................................................................................... 64
6.4.1
Implications for Theory ............................................................................................................................ 64
6.4.2
Implications for Practitioners ................................................................................................................... 65
6.4.3
Recommendations for Future research .................................................................................................... 65
REFERENCES
APPENDIX
Figur 1.1 Thesis outline ...................................................................................................................................................... 5
Figur 2.1 Dimensions of Transfer Policies ......................................................................................................................... 11
Figur 2.2 Flowchart of the Selection-Decision Process ..................................................................................................... 13
Figur 2.3 Strategic Analysis of Global Assignments ........................................................................................................... 16
Figur 2.4 Global Assignment Selection Process ................................................................................................................ 18
Figur 2.5 Typology of international manager-selection systems ........................................................................................ 21
Figur 2.6 Likelihood of a PCN manager in top management .............................................................................................. 23
Figur 2.7 Thesis Conceptual Framework ........................................................................................................................... 30
Table 2.1 Selection Methods ............................................................................................................................................ 18
Table 2.2 Advantages and Disadvantages of PCNs, HCNs, and TCNs ................................................................................ 25
Table 2.3 Factors that influence the staffing decision ....................................................................................................... 27
Table 2.4 The Selection Process ....................................................................................................................................... 27
Table 2.5 Motives for Recruiting a HCN manager as Opposed to a PCN- or TCN manager ................................................. 28
Table 5.1 Factors Influencing the Staffing Decision .......................................................................................................... 57
Table 5.2 The Selection Process ....................................................................................................................................... 58
Table 5.3 Motives for HCN recruitment as opposed to PCN/TCN recruitment ..................................................................... 59

STAFFING POLICIES OF SWEDISH MNCs
INTRODUCTION
Due to globalization the nature of business has been transformed and today most companies conduct business internationally. More and more companies have established units on foreign markets and this has resulted in fierce competition and increased demand for competent international managers. This chapter provides a background to the thesis topic, and is followed by a problem discussion, the purpose of the study, and the research questions to be investigated.
Today the impact that multinational companies' foreign direct investments has on the growth of the world economy is even more important than that of international trade (Harzing,
2004a). Many companies are at the evolutionary stage of the internationalization process where they are physically present on the foreign market, either through sales branches and subsidiaries, assembly, or production abroad (Phatak, Bhagat, & Kashlak, 2005). Whereas the sales of foreign subsidiaries of MNCs, in 1990, were roughly the same as the world exports, in 2001 the sales of subsidiaries was twice as high as the world exports (Harzing, 2004a).
It is said that the world is shrinking due to globalization; another way of looking at it is that the world is getting bigger, because due to advances in technology companies are expanding their operations into new markets and regions where they have not been before (Black,
Gregersen, Mendenhall, & Stroh, 1999). Therefore t he individuals in charge of a company’s international operations must function well across cultural boarders (Dowling & Welch, 2004).
Intensified international competition has lead to that companies subsequently aim at creating sustainable competitive advantages (Phatak et al ., 2005) . For a sustainable competitive advantage to be difficult for the competitors to imitate it should be based on the company's competences (Johnson, Scholes, & Whittington, 2005). Because of this managing the human resources of a company effectively has become essential in order to gain competitive advantage for the global company (Phatak et al ., 2005).
1.1.1
The International Manager
Black et al.
(1999) argue that the key for a company to compete successfully in the global market place is people. This is linked to that people are the ones that put together and implement strategy, construct and design organizational structures, and they also innovate and utilize technology. The international manager therefore plays an important role since it is the manager that carries the corporate culture to new locations around the world (Wilson &
Dalton, 1998). An international manager today must work with people from many cultures whereas previously an international manager could focus on coaching people merely from one country (Hurn, 2006). As a result of this, a demand for successful communication within multinational corporations, MNCs, despite differences in culture, values and beliefs has arisen
(Harris & Brewster, 1999). In order to effectively manage an organization, the people in charge must be in possession of a global perspective. Black et al.
(1999) recon, that an
[1]

STAFFING POLICIES OF SWEDISH MNCs
INTRODUCTION international assignment is the most powerful tool in shaping the mindset of an effective global leader. They further point out that one important mission for an organization is to recognize international assignments as an important function in order to develop capable future leaders.
For most international companies finding suitable candidates for international assignments is a major challenge for the human resource department (Black et al.
, 1999) and engaging in international activities is still connected to a high degree of risk for the company, much of which comes from the threat of expatriate failure (Phatak et al.
, 2005). The failure of an international assignment does not only mean that the manager has to return home, but can have far more wide spread consequences in terms of effects on the business operations in the host-country
(Harris & Brewster, 1999).
Therefore the expatriate manager, - that is a manager who works in another country or culture than that of his/her own, is dealing with enormous pressure to succeed in his/her mission (Wilson & Dalton, 1998). The ‘right person’ for an international assignment is found after a thorough analysis of the task, the foreign market and the personality characteristics of the potential candidate (Tung, 1981), and finding the right person decreases the risk of expatriate failure (Dowling & Welch, 2004).
According to Harzing (2004b) most articles on expatriate management begin with stating that expatriate failure rates are (very) high. It has however been argued that there is a lack of empirical proof to support the claim of expatriate failure. This could be connected to that expatriate failure has been measured in terms of those who returned prematurely. On the other hand, those managers who stay in the foreign country but fail to perform their assignments adequately could cause more severe damage to the organization, than those who returned home (Harzing, 2004b). The area of human resources has proven to have a key impact in achieving worldwide competitiveness for MNCs, which in turn has created an increased interest in the area international human resource management (Harzing, 2004a).
Human resource management (HRM) are those activities that a company undertakes in order to make use of its human resources in an effective way (Dowling & Welch, 2004). HRM include a number of activities such as human resource planning, staffing, performance management, training and development, compensation and benefits, and industrial relations.
However, HRM only involves people within one national boarder. International human resource management (IHRM) deals with more or less the same issues as HRM but, on top of that, also has to deal with the cultural aspects of operating in many different nations and regions (Dowling & Welch, 2004).
The IHRM system of a company, according to Taylor, Beechler and Napier (1996), is defined as “...the set of distinct activities, functions, and processes that are directed at attracting, developing, and maintaining an MNC’s human resources.” (p. 960). The human resources of an MNC have become a key in order to gain competitive advantage (Johnson et al.
, 2005).
This is connected to an increase in the international mobility of human resources as an effect of the rapid growth of internationalization (Black et al.
, 1999). These factors have together
[2]

STAFFING POLICIES OF SWEDISH MNCs
INTRODUCTION created a demand for ‘successful’ international business managers that are effective and efficient on an international level. It is worth noting that Tung (1998) point out that the distinction between HRM and IHRM is becoming vague. According to Tung (1998) this is connected to the growing convergence of the requirements for effective domestic and international managers. Previously the domestic manager was excluded from the interaction process with nationals from other countries, but today the also the domestic manager must have a multi-environment experience combined with cross-cultural skills to be effective
(Tung, 1998).
In order to determine who is an effective business manager the concept must be defined.
However, research has showed that international human resource managers cannot agree on one definition. Wilson and Dalton (1998) conclude that effectiveness seems to be ’in the eyes of the beholder’. Effectiveness can, according to Wilson and Dalton (1998), be measured by at least two components, the first one is adjustment and the second one is job performance.
However the level of effectiveness is coloured by who is judging it, the parent- or the host country boss, the organization itself or external stakeholders, subordinates or the expatriate him-/ herself. Therefore, the staffing decision with its selection process presents a great challenge for the people in charge of selecting managers for international assignments (Black, et al.
, 1999).
Managerial selection is defined as the “process of gathering information for the purpose of evaluating and deciding who should be employed in particular jobs” (Dowling & Welch, pp.83, 2004). Black et al . (1999) argue that in order have successful international operations, it is fundamental that the organization select an individual who will stay the full duration of the assignment and also accomplish the strategic and tactical purpose of the mission. In the
MNC’s recruitment process technical competence is often the primary decision criteria when selecting employees for international assignments (Dowling & Welch, 2004; Scullion &
Collings, 2006).
Technical ability is something which can be evaluated through the candidate’s past, and most companies select managers for international assignments based on domestic track records
(Black et al ., 1999). On the other hand, prior performance may not at all be connected to future achievements of the candidate in a new environment (Dowling & Welch, 2004).
Companies who take this approach rarely have a strategic perspective on the staffing decision for international assignments. Failure is more often connected to problems with cross-cultural adjustment than lack of technical skills (Harris & Brewster, 1999). According to Scullion and
Collings (2006) the reasons as to why many MNCs still rely on technical information is that a large part of the international assignments are concerned with filling a position. It is also connected to the fact that interpersonal and cross-cultural skills are difficult to recognize and determine.
When companies are moving through the stages of internationalization it is important to consider international strategy in relation to staffing decisions (Phatak et al ., 2005). The
[3]

STAFFING POLICIES OF SWEDISH MNCs
INTRODUCTION company must plan the selection strategically since increased internationalization demand more skilled international managers (Black et al ., 1999). In order for the company achieve success within their international operations they must be aware of the critical success factors involved in the operation (Dowling & Welch, 2004). According to Black et al. (1999), the manager in charge must have a vast experience within the organization including different previous positions if the goal is to improve the headquarters’ control of the foreign subsidiary.
However, if the international assignment is to improve the communication between the subsidiary and the headquarters then the manager must possess excellent cross cultural skills since the information flow must be two way (Black et al.
, 1999).
Research has showed that MNCs generally recruit parent-country nationals (PCNs) for international assignments (Harzing, 2004b) while the main reason for expatriate failure often is connected to problems with cross-cultural adjustments (Black et al ., 1999). With the advances in educational level in many countries around the world lack of technical skills is no longer an excuse to exclude host-country nationals (HCNs) from the selection process
(Harzing, 2004b). The strategic decision based on the nationality of the manager serves many strategic purposes such as establishing global integration and maintaining control (Edström &
Galbraith, 1977), through mobilizing the corporate knowledge globally (Colakoglu, Tarique,
& Caligiuri, 2009), and as a result of the conditions in the host-country (Harzing, 2001). The mindset of the organization affects the global staffing decision, whether or not the organizational attitude favours the use of PCNs, HCNs or if the nationality of the manager is unimportant (Perlmutter, 1969).
Global staffing is defined as “the critical issues faced by multinational corporations with regard to the employment of home, host and third country nationals to fill key positions in their headquarters and subsidiary operations” (Scullion & Collings, 2006, p.3), and staffing policy is defined by Wild, Wild, and Han (2008) as “The customary means by which a company staffs its offices” (p.441).
As explained above the area of IHRM involves a number of issues, however this study will only consider the aspect of ‘global staffing policies’. Global staffing is important due to the fact that international growth has placed a demand on management to succeed with the staffing decisions for top managerial positions on foreign markets (Black et al.
, 1999). To investigate global staffing policies factors that influence the staffing decision should be considered (Scullion & Collings, 2006). The global staffing decision can, according to
Dowling and Welch (2004), be understood by reviewing the actual selection process for top managerial positions in foreign markets. Global staffing policies have a significant impact on the functioning of the subsidiary and, Harzing (2004b) point to that it is, in the light of this is surprising that there is such paucity in the research regarding the motives to select HCN-,
PCN- or TCN managers.
[4]

STAFFING POLICIES OF SWEDISH MNCs
INTRODUCTION
In view of the above, this study aims at gaining a deeper understanding into the managerial staffing policies of MNCs; more specifically the purpose of this study is:
“To investigate the staffing policies of Swedish MNCs for managerial positions in foreign markets.”
This purpose will be reached by addressing the following research questions:
RQ1.
RQ2.
RQ3.
How can the factors influencing staffing decisions for key managerial positions for foreign markets be described?
How can the MNC selection process for top managerial positions for foreign markets be described?
How can the motives for host-country recruitment as opposed to dispatching of
expatriates from the MNC’s home country or third-country be described?
In Figure 1 below the thesis outline is displayed and the six chapters which construct the thesis are presented.
Figure 1.1 Thesis outline
As shown above in this first chapter the topic has been introduced and MNC’s problem of managing people across borders is highlighted in order to justify the research purpose and the research questions for the present study. In chapter 2 theories on the topic are reviewed and the conceptual framework that will be applied in this thesis is presented. This is followed by chapter 3 where the research methodology will be presented, along with a discussion regarding the reliability and validity of the study. In chapter 4 the collected empirical data will be reviewed. Later, in chapter 5, the empirical data is analysed through the conceptual framework. In the sixth and last chapter of this thesis the conclusions drawn and the findings of this research is presented along with implications for further research.
[5]

STAFFING POLICIES OF SWEDISH MNCs
LITERATURE REVIEW
In this chapter existing research and theories on the thesis topic will be reviewed in the following order: first the research approach followed in this study, second theories regarding factors that affect staffing policies, third theories of the selection process for international managerial positions, fourth, theories regarding the motives as to why companies hire PCN,
HCN, or TCN managers. Finally, a conceptual framework which aids data collection and data analysis will be presented.
According to Johnson et al. (2005) the resource-based view argues that an organization’s strategies of should be built on the identification of its unique capabilities. Whereas Hatch
(2002) state that the resource-based view is founded on the assumption that an analysis of relationships within the organizational network will help managers to realize, and control, the power- and dependence relationship between the organization and its stakeholders. Hatch
(2002) further argues that knowledge of the effect that the relationship has will enable the managers to predict potential influence from the surrounding environment and create counter dependence and thereby reduce the effect.
The institution based view of organizations is, according to DiMaggio and Powell (1983), not only shaped by the organizations internal goals but also by the value and belief systems of the society in which they are operating, this is referred to as ‘coercive isomorphism’. DiMaggio and Powell (1983) further states that when an organization is shaped by rules, regulations and professionalism it is referred to as ‘normative isomorphism’. Hatch (2002) highlight that when an organization adapt itself according to institutional demands it will receive social support and its survival is thereby assured. DiMaggio and Powell (1983) define ‘mimetic institutional effect’ as when the organization strives after becoming like other organizations, which result in coping of structure, actions etc. DiMaggio and Powell (1983) further view ’the aspect of social acceptance’ as an input to the organizations value chain that the organization, together with other resources, are depending on.
Colakoglu et al.
(2009) advocate that when analysing an organization through an institutional view it is important to consider how the organization adapts itself to its institutional context.
Whereas Hatch (2002) state that it is the sources of the institutional affect must be analysed and the shape of the effect must be taken into consideration weather it is normative, forcing, mimicking. According to DiMaggio and Powell (1983) it must further be considered how the decision processes are shaped due to the institutionalization rather than rational choices. To summarize it all; the resource based view look at the organization from the perspective of top management, while the institutional view is founded on environmental level and try to explain why many organizations are similar.
According to Colakoglu et al.
(2009) the resource-based theory view, the valuable, scarce, inimitable and foremost non-substitutable resources of a company, such as employees, as the most important sources to create, and sustain, a competitive advantage. This study is
[6]

STAFFING POLICIES OF SWEDISH MNCs
LITERATURE REVIEW researching the staffing policies of Swedish MNCs from a corporate perspective and therefore a resource-based view of the companies will be applied.
According to Edström and Galbraith (1977) depending on the staffing strategy applied different types of knowledge stocks are bound to emerge among the upper level management in the host-country. This is, according to Colakoglu et al.
(2009), connected to that any expatriate assignment, independent of motive; automatically result in transfer and flow of tacit knowledge. An empirical model of multinational staffing strategies was conducted by
Perlmutter (1969), which stated that the level of multinationality is determined by the organizations orientation towards foreign people and resources. The key in Perlmutter’s study was to determine the multinationality of a company, but since it was researched through the company’s orientation towards people and resources, it is of interest to this study.
2.2.1
Mindset of the Organisation
Three different states of mind of the international executive were distinguished by Perlmutter
(1969), the first one is ethnocentric (home country orientated), the second one polycentric
(host-country orientated) and the third one is geocentric (world-oriented). These three headquarter attitudes never appear in pure form but are still clearly distinguishable.
An Ethnocentric Mindset
A company with an ethnocentric view argues that PCNs are superior to any other nationals in headquarters or subsidiaries. According to Perlmutter (1969) this results in that only PCNs are considered for key positions in headquarters as well as in subsidiaries. Dowling and Welch
(2004) state that an ethnocentric manager will manufacture more ‘simple’ products abroad while the complex operations are kept on the home-country market in order to keep the secret of manufacturing among the trusted PCNs. Dowling and Welch (2004) further point to that an ethnocentric company therefore often emphasize its nationality –‘this is a Swedish company’.
According to Wild et al.
(2008) this results in that ethnocentric companies formulate strategies that should apply to ‘all markets’ since it should be applicable in all countries which the company operates in. The communication flow in an ethnocentric organization is one-way from the headquarters implying that “This works at home therefore it should work in your country” (Perlmutter, p.12, 1969).
According to Dowling and Welch (2004) a company often pursues an ethnocentric staffing strategy when there is a lack of qualified HCN managers. Another reason, proposed by
Dowling and Welch (2004), for applying an ethnocentric staffing policy is if there is a strong emphasis on communication and control towards the headquarters, which is common in the initial stages of the internationalization process to reduce the perceived high risk. Wild et al.
(2008) state that a company that aims at maintaining a tight control over the decision making process in foreign subsidiaries tend to apply this approach. Another reason to apply an ethnocentric staffing approach, which Wild et al. (2008) suggests, is that managers who have worked in the organization in the home country tend to bring the corporate culture with them and establish it in the foreign market.
[7]

STAFFING POLICIES OF SWEDISH MNCs
LITERATURE REVIEW
The disadvantages to an ethnocentric approach are, according to Dowling and Welch (2004); because HCNs are excluded from the process it can lead to reduced productivity and increased turnover of HCN employees due to lack of promotional opportunities, the adjustment process of PCN managers takes time, and the income gap to PCNs are viewed as unjust by HCNs. Wild et al . (2008) argue that ethnocentric staffing is expensive, due to costs connected to relocating managers and their families, a PCN manager can also create barriers in the host country because it creates an image of a ‘foreign’ company and employees might feel that their needs are not understood by management due to cultural differences.
A Polycentric Mindset
According to Perlmutter (1969) a polycentric state of mind is dominant when the company has recognized the differences between countries and acknowledged that host-country cultures are difficult to understand. Permutter (1969) further states, that a polycentric organization therefore sees HCN managers as best suited to understand the local market.
According to Wild et al. (2008) this approach is appropriate for organizations who wish to give its foreign subsidiaries a degree of autonomy in the decision making process. The headquarters executives tend to stay in the background as long as the HCN managers deliver profits from the foreign subsidiary. However, according to Permutter (1969) in a organization with a polycentric mindset a foreign manager can never be considered for a top management position at headquarters due to that HCNs are regarded as more suitable.
However, this approach does not mean that HCN managers are left on their own. According to Wild et al. (2008) it is common that polycentric organizations conduct extensive training of
HCN managers at headquarters in order to introduce them to the corporate culture. An advantage of a polycentric approach is, according to Dowling and Welch (2004), that language barriers are eliminated, as well as the ‘adjustment problem’ and PCN manager would experience and therefore also reduce the need of cultural awareness training programs.
Another benefit, which Wild et al.
(2008) highlighted, is that the extensive knowledge the
HCN managers possesses of the local market can be beneficial for the whole organization.
Further, Wild et al. (2008) point to that the employment of HCN managers is less expensive than that of PCN managers because there are no costs connected to relocating the manager and family.
According to Wild et al. (2008) employment of HCN managers enable the organization to avoid the high turnover of key managers that an ethnocentric approach results in. Whereas
Perlmutter (1969) point to problem areas such as, a language barrier between HCN managers and the headquarters, the issue of differing national loyalties, and that the company might become a ‘federation’ with independent national units with minimal linkage to the headquarters. Wild et al. (2008) suggest that this would mean that headquarters lose control of its operations in the host country. Further, Dowling and Welch (2004) highlight that problems with resource allocation might occur since headquarter managers will have a limited exposure to foreign assignments since they never operate outside their ‘home’ market. However, Wild et al. (2008) state that this will not be a problem if the company has an approach where they need to act local in each market. On the other hand, according to Wild et al. (2008), it will be
[8]

STAFFING POLICIES OF SWEDISH MNCs
LITERATURE REVIEW a problem if they have a global strategy, because then the preformance will be affected due to lack of knowledge sharing, integration and a common image of the company.
A Geocentric Mindset
When the organization is world oriented, which Perlmutter (1969) refers to as geocentric, top manager positions are filled regardless of nationality. According to Wild et al.
(2008) the ultimate goal for a geocentric organization is to have a worldwide approach both at subsidiaries and at headquarters. Perlmutter (1969) suggest that this approach would further require a reward system to stimulate subsidiary managers to work towards global objectives.
According to Wild et al.
(2008) PCN, HCN, and TCN managers are found in key position throughout a geocentric organization, and the selection of managers is based on the operation’s specific needs. Dowling and Welch (2004) highlight three major advantages with this approach; the company develops an international executive team that has a global perspective on the company’s operations, the ‘federation’ issues are eliminated, and it supports cooperation and sharing of resources.
According to Dowling and Welch (2004) the disadvantages with a geocentric approach is that; the host government may use immigration regulations in order to increase the number of HCN managers, may be expensive to implement due to standardized international base pay which often is higher than the rate in many foreign countries. Further, Wild et al.
(2008) point to that the manager and their families might be relocated so often as every other year, which result in inconsistency. Dowling and Welch (2004) propose that to have a truly geocentric approach the company must have a centralized control of the staffing policy in order to ensure that large numbers of PCN, HCN and TCN managers operate in foreign markets. This will, as Dowling and Welch (2004) show, result in a loss of autonomy for the subsidiary and they may resist this decrease of independence.
Ethnocentric- Polycentric- Geocentric
According to Harzing (2004a) organizations which are global, or to a lesser extent international, will foremost have an ethnocentric state of mind. On the other hand, Harzing
(2004a) suggest that, a company with a polycentric attitude tend to be multi-domestic and a transnational organization has a tendency to be geocentric. Pearlmutter (1969) argue that companies start out as ethnocentric, and thereafter grow to polycentrism before they reach the final state of mind with geocentrism. This is in the lines with Harzing (2004b) and the evolutionary stages of the internationalization process as discussed by Phatak et al. (2005).
However, it does not explain the motive as to ‘why’ companies engage in international transfers.
2.2.2
Edström and Galbraith’s Framework for International Transfers
Three major reasons have been proposed by Edström and Galbraith (1977) as to why organizations engage in international transfers.
Fill Positions
The first one is to fill positions in developing countries; this is done when there is a lack of individuals with sufficient skills in the host country. According to Edström and Galbraith
(1977) the human resource department in this kind of organization works reactively to fill
[9]

STAFFING POLICIES OF SWEDISH MNCs
LITERATURE REVIEW positions, the expatriates tend to be young and is foremost selected for their technical skills.
The subsidiary in the foreign market recognizes the need of a manager and subsequently also initiate, manage and pay for the transfer. Edström and Galbraith (1977) suggest that the cause of this could be connected to an increased need of administrative and financial control, a PCN manager would almost instantly correspond to these requirements and further pass on knowhow, technical skills, administrative systems etc. On the other hand, Edström and Galbraith
(1977) state that a HCN manager would require training in order to bring consistency to the way ‘things are done’ in the organization to result in a more smooth internal bureaucracy.
Develop Managers
The second motive, according to Edström and Galbraith (1977), is for the organization to develop managers for positions of responsibility; this means that an organization would send an expatriate even if there were qualified HCN managers because they want to provide a manager with potential with vast international experience. Edström and Galbraith (1977) highlight that in this organization the human resource department must be powerful to convince the subsidiary of the superiority of selecting an expatriate over a local manager.
Further, they must have an extensive information system in order to indentify positions and people needing training. An organization with this approach would, as stated by Edström and
Galbraith (1977), send many managers on international assignments so that those who are successful can later be sent on further international assignments.
Organizational Development
The third and final motive suggested by Edström and Galbraith (1977) was organizational development which is when transfers are done in order to modify and sustain the organizations structure and decision processes. This approach involves, as showed by
Edström and Galbraith (1977), a strong human resource department and the decision to send expatriates are strategically tied to the organizations main objectives. According to Edström and Galbraith (1977) the idea behind this is that transfer of managers will socialize them, create international networks, and make them less ethnocentric but still establish an organizational control. These factors are summarized by Edström and Galbraith (1977) in
Figure 2.1 on the next page.
[10]

STAFFING POLICIES OF SWEDISH MNCs
LITERATURE REVIEW
Figure 2.1 Dimensions of Transfer Policies
Source: Adapted from Edström and Galbraith (1977)
According to Harzing (2004b) organizations with ‘the fill-positions’- or ‘the organizational development’ motive to recruit international managers have an agenda of organizational control. In the first perspective Harzing (2004b) advocate that it is through transfer of the parent company routines and knowledge and in the second one through acculturation which is achieved through socialization and interaction between managers of different nationalities.
According to Scullion and Colling (2006) these motives are not mutually exclusive but rather, that it is important that companies realise the strategic advantage of using expatriates as a strategic tool to reach organizational goals. Today’s international business environment is far more complex than the environment which Edström and Galbraith studied in 1977, and
Scullion and Colling (2006) state that today there is rarely one single objective to why the organisation engage in international transfer of manager but rather many different reasons.
The state of mind of an organization, as described by Perlmutter (1969), and Edström and
Galbraith’s (1977) motive for international transfer, affects an organizations selection base of potential candidates, which in turn will affect how the selection process is conducted. Tung
(1981) argue that it is important to apply a contingency approach to the selection process since strategies that only focus on one particular criterion, and not taking the environment and task into consideration, has proven to reach little success. According to Tung (1981) the
‘right’ person for an international assignment is found after a thorough analysis of the task, the foreign market and the personality characteristics of the potential candidate.
[11]

STAFFING POLICIES OF SWEDISH MNCs
LITERATURE REVIEW
2.3.1
Tung’s Framework for the Selection Process
Tung (1981) pointed to that most of the research in the area of concerning the selection process for foreign assignments has been fragmented and foremost focused on developing a list of criteria that an international manager should possess. According to Tung (1981) the identification of criteria is important, but unless it is joined together in a comprehensive framework it is not useful in practice. In the light of this Tung’s (1981) conceptual framework for the selection process was developed highlighting three major factors; 1, variables crucial to success or failure; 2, the relationship between those variables; and 3, the weight of each those variables depending on situation. According to Tung (1981) the framework was developed with a contingency approach because it demonstrates the misleading notion that there would be one universal ‘best way’ to finding a manager for foreign assignments, this approach argue that the success of a manager is depending upon a unique set of circumstances at a specific point in time.
Tung (1981) lifted forward four general areas that have proven to contribute to the mangers success in foreign markets; technical competence - distance to headquarters might make this a crucial factor if there is an absence of colleagues to consult in the subsidiary; personality traits or relational abilities –ability to deal with clients, colleagues, and superiors but it also concerns the ability to operate in a culture distant from one’s own; environmental variables – skills of the individual when it comes to identify and handle governments, unions, competitors, etc.; and family situation –the ability of the spouse to adjust living in a foreign environment .
A comprehensive selection paradigm must, according to Tung (1981), take into consideration the various factors that contribute to the success of international assignments, and it is of uttermost importance to consider the situation specific criteria connected to the country in which the future manager will operate. Therefore not only the characteristics of the individual must be analysed but also the environment along with a clear identification of the task. The first step is to identify the assignment and determine the level of interaction with the local community that will be required. After this the environmental variables of the host-country must be identified and to which extent they differ from the home-market along with the candidate’s willingness to relocate. The human resource department should further investigate whether the host country national possess the required skills for the assignment as the recruitment of an HCN manager is connected to knowledge of the culture, eliminated language barriers, decreased costs, etc. Tung (1981) argue that the search for a PCN or TCN manager should only be launched if a suitable HCN manager is not to be found. Tung’s research is summarised in Flow Chart of the Selection-Decision Process which is demonstrated in Figure 2.2.
According to Tung (1981) the first step in the selection process is to identify the assignments that the manager will be required to handle. After that is done, the selectors need to determine who would be most suitable for the job, a PCN-, HCN-, or TCN manager. If it is found that a
PCN- or TCN manager should fill the position, the search should be conducted among those who are already present in operations in the foreign market or within competing industries.
[12]

STAFFING POLICIES OF SWEDISH MNCs
LITERATURE REVIEW
Figure 2.2 Flowchart of the Selection-Decision Process
Source: Tung (1981)
After this the selectors, according to Tung (1981), need to determine the degree of interaction with the host market that will be required from the manager, this is done to establish the importance of relational abilities. Another important factor, brought to light by Tung (1981), is that the selector must asses is if the candidate is willing to go abroad. If the there are great differences between the culture of the parent country and that of the host country then the selection decision should rely to great extent on relational abilities, if there is not a significant cultural difference between the countries then factors relating to the actual assignment will be of more importance. (Tung, 1981)
[13]

STAFFING POLICIES OF SWEDISH MNCs
LITERATURE REVIEW
Tung’s reviewed framework of the selection process
Tung’s contingency framework of the selection process was developed nearly thirty years ago and the global business environment has changed since then, Tung (1998) conducted a new study to determine if the framework developed 1981 still is relevant, the research focused on the aspect of seven major changes that have taken place since the early 1980’s.
1.
Shift in calculus of Global Competition
Competition originates from new sources; emerging markets and newly industrialized economies.
2.
Formation of Global Strategic Alliances
Result in an increased level of international movement of people (managers).
3.
Global Integration versus Local Responsiveness
“Think globally and locally, act appropriately.”
4.
Emergence of Network Organizations
Geographic location loses its importance in network organizations.
5.
Growing Diversity in the Workforce at Home and Abroad
Diversity come with new workplace conflicts sprung from differences in race, gender and culture.
6.
Growing Convergence of Core Competences required of Domestic and International
Managers
The domestic manager is also confronted with problems that come from an international environment.
7.
Increasing Use of Overseas Assignments for Career developing Purposes
As the demand for international knowledge also among domestic managers foreign assignments has proven to have a positive career impact.
The contingency framework for the selection process which was developed by Tung (1981) proved to still be relevant according to Tung (1998), with the following supplements; in global strategic alliances it is important to take the corporate culture into the analysis since it might vary between the different companies; the expatriate must possess strong negotiation skills and be flexible due to today’s multi company/industry environments; and have great sensitivity to the needs of others.
2.3.2
Black, Gregersen, Mendenhall, & Stroh’s Strategic approach to the Selection Process
Black et al.
(1999) has created a framework of recommendations as to how MNCs strategically should approach the selection process for top managerial positions in foreign markets. Their recommendations of steps in the selection process consist of two parts, firstly they emphasize a strategic analysis of global assignments, and thereafter the selection process for a specific assignment is considered.
[14]

STAFFING POLICIES OF SWEDISH MNCs
LITERATURE REVIEW
Strategic Analysis of Global Assignments
This analysis is required to be done in order to make an assessment of the company’s overall needs and thereby define its current candidate pool. However, according to Black et al.
(1999) it is of uttermost importance to the company’s future performance that they also assess to which extent its candidate pool can supply its future needs for effective global managers.
Analyzing Current Needs
According to Black et al. (1999) current needs must be analysed to determine the organizations level of globalization. The organization must determine from a strategic perspective what they actually need. Black et al. (1999) suggest that this can be done by answer questions such as; “Does the firm need to send people from headquarters for purposes of coordination and control? Does the company need to raise the level of communication between headquarters or between subsidiaries? Does the firm need to develop more future executives by giving them global assignments as developmental experiences?”
Defining the Candidate Pool
The human resource department is must be aware of the organization’s current candidate pool. Black et al. (1999) propose that this can be done by initializing a comprehensive database that lists managers current assignments, technical skills, cross cultural knowledge, previous international experience, etc.
Assessing Future Needs
According to Black et al. (1999) the company’s future needs for global managers the need must be assessed. However, the organization must also consider which will be its key strategic functions in the future in order to assess future needs accurately.
Developing the Candidate Pool for Strategic Success
Black et al.
(1999) state that the final strategic step in preparing the organization for future demands of international managers is to develop a candidate pool for strategic success.
According to Black et al.
(1999) this is done through continuous assessment of the managerial- and cross-cultural skills of the candidates. These cross-cultural skills can be assessed through surveys such as G-A-P-S (Global Leadership Institute) in order to be able to develop the skills of the managers if they are considered weak. The process is graphically displayed on the next page in Figure 2.3.
[15]

STAFFING POLICIES OF SWEDISH MNCs
LITERATURE REVIEW
Figure 2.3 Strategic Analysis of Global Assignments
Source: Black et al. (1999, p.77)
Selection Process for Specific Assignments
When the assessment of the global strategic assignments is done and the organization’s needs for the future are determined, the selection of an individual for a specific assignment must be done. This is, according to Black et al.
(1999) best done by following the five steps which they propose.
1.
Creating a Selection Team is the first step and the team should consist of at least three members; a PCN manager, a HCN manager and a human resources representative.
The PCN- and HCN managers ensure that the objective of both the parent company and the subsidiary is served. The human resources representative can make sure that a wide range of selection criteria are utilized and also provide a broad selection of potential candidates for the position.
2.
a) Defining Strategic Purposes for Global Assignments is important in order to be able to select the right candidate. Black et al.
(1999) point to that today most international assignments are short-term and problems solving, therefore companies must be more reflective when they determine the strategic functions of an assignment before the assignment is made.
Assessing the Context is done in order to determine the extent of interaction with the culture of the host country, which is important to do in order to Establishing Selection Criteria.
When that is done the technical-, managerial, and cross-cultural skills required for the assignment is determined, if there is a difficult host-country culture then the selection criteria should emphasize flexibility and ethnocentricity according to Black et al.
(1999).
[16]

STAFFING POLICIES OF SWEDISH MNCs
LITERATURE REVIEW b) In order to decrease the level of subjectivity the selectors must Review Pool of candidates in order to make sure that it does not only consist of candidates who happen to know a given individual. The company can also create a list through internal surveys for which individuals within the organization that are willing to go on international assignments.
3.
Defining the Candidate Pool is done when the selection criteria has been developed and the organization can use this information in order to match potential candidates with specific assignments, if there is a ‘global candidate pool database’ available the selectors can use this to identify candidates.
4.
Utilizing Standardized Tests and Feedback Instruments can be costly but since sending a manager on an assignment in a foreign market is connected with large costs for the organization, the use of feedback instruments such as G-A-P-S can be a seen as an investment since it attempts to insure that they are selecting the right person for the mission. One-on-one interviews is a common selection method but also one that is not reliable, it is therefore important that the selectors decide which methods are the most effective for that specific assignment. Interviewing the candidate and spouse is done when the candidate pool is narrowed down to one or two potential candidates. An interview should be in-depth and should provide an accurate and realistic assessment of how living in the foreign country could be like for the candidate. This is very important and should also be done with the spouse in order to provide a realistic image of what is expected of him/her.
5.
Making the Offer should be done when the selectors can base their decision on relevant, factual, and comprehensive information which they have gathered via utilizing several selection methods and conduction interviews with both the candidate and the spouse. Making the Transition to Training and Preparation , if the selection process has been strategic it is usually, according to Black et al . (1999), done in such good advance that there is time for appropriate training and preparation in relation to the specific assignment.
The steps in the global assignment selection process are visualized in Figure 2.4 as proposed by Black et al. (1999).
[17]

STAFFING POLICIES OF SWEDISH MNCs
LITERATURE REVIEW
Figure 2.4 Global Assignment Selection Process
Source: Black et al. (1999, p.80)
2.3.3
Selection Methods
After that the selection team has narrowed down which criteria that they find important for the specific assignment, the candidates’ correlation with those criteria must be assessed.
Technical skills can be evaluated through previous achievements or actual tests, while the personal characteristics of a candidate are much more difficult to accurately measure in a reliable way (Dowling & Welch, 2004). To enable to organization and its selection team o evaluate the skills of the candidate there is a range of available selection methods, which are more or less effective (Black et al.
, 1999). In a research report by Farhang (1999) the most frequently used methods for selecting managers for foreign assignments are summarized, the summary conducted by Farhang is displayed in Table 2.1 on the next page.
[18]

Table 2.1 Selection Methods
STAFFING POLICIES OF SWEDISH MNCs
LITERATURE REVIEW
Source: Adapted from Farhang (1999, p. 9-10)
2.3.4
Harris & Brewster’s Typology of international manager-selection systems
Harris and Brewster (1999) identified four different variations of the selection system for international managers. The first two dimensions, that Harris and Brewster (1999) found, are
[19]

STAFFING POLICIES OF SWEDISH MNCs
LITERATURE REVIEW connected to the existence of formal and informal systems at organizational level. The other two dimensions that Harris and Brewster (1999) identified are connected to whether the selection process is open or closed. An open system is characterized by the fact that all available positions are clearly announced and that anyone with the required qualifications may apply and the candidates are interviewed with varying degrees of formalized tests, thereafter the selection decision is taken by consensus. In a closed system the selectors choose or nominate suitable candidates. In a closed scenario there may only be one manager involved in the selection process and there is a high risk of subjectivity.
Closed/ Informal
In a system that is closed/ informal the individual preferences of the selectors are of significance. This can lead to recruiting the wrong people if the preferences are inconsistent and incoherent with the characteristics of an effective international manager. The importance of the selector’s preferences is tied to the absence of a formal structure and that there is no open debate regarding the criteria, in this scenario the employees are unaware of the process taking place.
Open/ Informal
On the other hand, in the open/ informal system employees have access to information regarding the available positions and are aware of the process taking place, but the selection decision is still based on personal recommendation and reputation. In such a system the selection decision is often made before any formal interview takes place. Formal selection criteria are formulated; however, the extent to which the match between criteria and the candidate are discussed is limited.
Closed/ Formal
A discussion regarding the match between the candidate and criteria is taking place in a selection process which is closed/ formal. Here the candidates are evaluated through formal criteria. However, the pool of candidates is determined by the selectors and gives room for individual preferences to omission suitable candidates. In this system networking and reputation play an essential role and there is a high risk of subjectivity.
Open/ Formal
The level of subjectivity is decreased in a system which can be characterized as open/ formal.
This is done via that the candidates are evaluated against formalized criteria together with comparison of own, and other selectors, assessments in order to determine the best ‘fit’. These lines of action decrease the effects of the individual selectors’ preferences and provide a more objective view of an effective international manager. Harris and Brewster (1999) summarized these factors in the model Typology of international manager-selection systems which is displayed on the next page in Figure 2.5.
[20]

STAFFING POLICIES OF SWEDISH MNCs
LITERATURE REVIEW
Figure 2.5 Typology of international manager-selection systems
Source: Adapted from Harris and Brewster (1999)
According to Harris (2001) an open/ formal system is preferable when it comes to create equality of opportunity, between males and females as well as between PCNs, HCNs, and
TCNs, within international management selection process. Harris (2001) state that the reason for this is that all employees have access to the selection process and that the risk of subjective judgements is constrained.
Selection and Requirement Process Explored in Practice
Harris and Brewster (1999) concluded in their study that there is a lack in the literature on how the international manager selection process is done in reality. They introduce something which they refer to as the “Coffee Machine system”, which in their study proves to be a common form of expatriate selection. They explain the process as following; when executives chat around the coffee machine the need to find someone to fill an international assignment is casual arisen.
`How’s it going?’
`Oh, you know, overworked and underpaid.’
`Tell me about it. As well as all the usual stuff, Jimmy in Mombai has just fallen ill and is being ¯ own home. I’ve got no idea who we can get over there to pick up the pieces at such short notice. It’s driving me crazy.’
`Have you met that Simon on the fifth floor? He’s in the same line of work. Very bright and looks like going a long way. He was telling me that he and his wife had a great holiday in Goa a couple of years ago. He seems to like India. Could be worth a chat.’
`Hey, thanks. I’ll check him out.’
`No problem. They don’t seem able to improve this coffee though, do they?’
(Harris & Brewster, 1999, p.497)
[21]

STAFFING POLICIES OF SWEDISH MNCs
LITERATURE REVIEW
According to Harris and Brewster (1999) the following scenario take place; while they wait for their coffee a short informal list of potential candidates is formed and after that the company’s formal selection process is started in order to legitimize a decision that in fact already has been made around the coffee machine. In this scenario the interview will be informal and contain discussion of contract and benefits, after this, the human resources department step-in to settle things regarding the physical transfer and training of the expatriate.
According to Colakoglu et al. (2009) a multinational company can staff its subsidiary either with parent-country nationals, host-country nationals or citizens from a third country. The influence that the Nationality of the manager has on the selection decision can be established via a strategic staffing policy. Such a policy serves many purposes such as; establishing global integration and maintaining control, as a result of the conditions in the host-country, and through mobilizing the corporate knowledge globally (Edström & Galbraith, 1977; Harzing,
2001; Colakoglu, Tarique, & Caligiuri, 2009). A number of demands and factors affect who an organization will select to become an international manager in foreign markets. The motive as to whether a PCN-, HCN-, or TCN manager will be selected is, according to Colakoglu et al. (2009), depending the level of importance that the organization associates with the influencing factors.
2.4.1
The Role Of The International Manager
According to Dowling and Welch (2004) the most important reason as to why companies use expatriates is to establish a personal/cultural control which is conducted both directly
(explicit) and indirectly (implicit). Harzing (2001) classify the role of the international manager in relation to control using the analogy of bears, bumble-bees and spiders. If the manager serve to replace or balance the process of centralized decision making together with surveillance of subsidiary performance, Harzing (2001) refer to this as the ’bear role’.
However, according to Harzing (2001) if the managers mission is to establish control based on socialization, they are referred to as ‘bumble-bees’ as they cross-pollinate the organization by “flying from plant to plant” (Harzing, 2001, p.369). If the manager on the other hand has the role of weaving informal communication networks and through those implement control then the managers are referred to as ‘spiders’. The role of the international manager as
‘bumble-bee’ or ‘spider’ is, according to Harzing’s (2001) study, of greater importance for organizations that show a great extent of local responsiveness and are not, or to a low degree, depending on the headquarters for purchases or sales.
2.4.2
Pcn-, Hcn- Or Tcn Managers?
According to Collings, Scullion, and Dowling (2009) there has recently been a shift from the traditional reliance on PCN managers towards implementing a strategic IHRM plan in the global environment. According to Scullion and Collings (2006) the age of the subsidiary is a factor that influences the nationality of individuals holding key managerial positions. Scullion and Collings (2006) further state that MNC’s subsidiaries which have recently been established on the foreign market tend to have a higher number of PCN managers than those who have been in the market for a longer period of time.
[22]

STAFFING POLICIES OF SWEDISH MNCs
LITERATURE REVIEW
The nationality of managers on foreign assignments was studied by Kopp (1994) where the international staffing policies of Japanese, European and US multinationals were compared.
Japanese companies proved to be those who had the highest number of PCN managers employed in their foreign subsidiaries, this confirmed Tung’s (1981) findings. The US multinationals showed the lowest number of PCN managers and the European companies in the study were somewhat in between these two extremes (Kopp, 1994). However, neither
Tung (1981) nor Kopp (1994) take industry effect into account or differentiate between host countries, this is something that was taken into account by Harzing (2001) in her study.
Advantage and Disadvantages of PCNs, HCNs and TCNs
The advantages and the disadvantages by using PCNs, HCNs and TCNs for international managerial assignments were studied by Harzing (2001). Harzing created a framework with the factors influencing the staffing decision; the framework is displayed in Figure 7..
Figure 2.6 Likelihood of a PCN manager in top management
Source: Adapted from Harzing (2001)
Harzing (2001) argue that in cultures with high uncertainty avoidance, according to
Hofstede’s (1994) framework, the level of PCN managers on key positions for foreign assignments tend to be higher. Harzing (2001) argue that this is connected to a fondness of being ‘in control’ and that there, in such cultures, is an established mistrust against foreign managers. The selection process in this kind of culture favours the recruitment of a senior
PCN manager for foreign assignments. This is, according to Harzing (2001), connected to that headquarters might not trust information from local managers and fear that the level of commitment is lower from an HCN or TCN manager. According to Scullion and Collings
[23]

STAFFING POLICIES OF SWEDISH MNCs
LITERATURE REVIEW
(2006) the use of PCN managers have shown to be especially resourceful in the initial stages of an MNC’s international operations, due to its strong direct control and in order to establish the corporate culture and philosophy.
Parent-Country Nationals (PCNs)
The cultural distance between the host- and the parent country is of significance but another of importance is the type of industry in which the company is operating. According to
Harzing (2001) an MNC which is operating in the financial- or printing & publishing industry is more likely to have a PCN manager than a company operating in the advertising-, computer-, electronic equipment, or the food industry. Black et al. (1999) state that placing
PCNs in key positions global assignments can insure control and coordination for the organization in terms of similar corporate culture and shared objectives. Harzing (2004b) believe the control aspects to be connected to industry specific requirements, while the other industries necessitate more knowledge of the local market. One problem that may arise, according to Scullion and Collings (2006), from the use of PCN managers is that since the expatriate assignment itself often is set to a limited period of time, the expatriate might take a short-period approach to the operations of the subsidiary which is not always in its best interest. Harzing (2001) point to that if an organization has none or simply a few PCN managers in the foreign market, adding a PCN manager to the subsidiary will create positive effects on shared values and informal communication.
Host-Country Nationals (HCNs)
According to Scullion and Collings (2006), the major benefit from appointing HCN managers to key managerial positions in foreign markets is that the organization will gain deep fundamental knowledge of the local business environment and learn to meet expectations that derive from culture and tradition. Further, Scullion and Collings (2006) point to that recruiting an HCN manager is generally a cheaper alternative than employing a PCN or TCN manager.
For an MNC that have a subsidiary that lack the presence of PCN managers Scullion and
Collings (2006) argue that the MNC will need sophisticated formal procedures and financial control systems, this is important in order to observe the performance of the subsidiary and ensure that it correlates with the standards and requirements of the company. An HCN manager can encounter communication problems with the MNC headquarters, according to
Scullion and Collings (2006), this is due to the lack of networks but also the paucity of familiarity with the organizational habits as such.
Third-Country Nationals TCNs
TCN managers are those who, according to Scullion and Collings (2006), have the easiest adjustment process. Scullion and Collings (2006) believe this to be connected to that TCNs often are transferred within a geographical area and this give them an increased knowledge of the host country culture, however this is something which is not empirically proven. Further,
Scullion and Collings (2006) point to how TCN managers have proven to be a useful option when the MNC set up operations in a foreign market that has a different language than the parent country. Scullion and Collings (2006) further give the example of that an American
MNC who already has operations in Portugal could benefit from using a Portuguese manager when initiating its operations in Brazil. The Portuguese manager would then already be
[24]

STAFFING POLICIES OF SWEDISH MNCs
LITERATURE REVIEW familiar with the organizational code of conduct and corporate culture and also speak the native language which would decrease language barriers and improve communication. A manager from a third country might be more inclined to accept international assignments if the home labour market is small and lack position openings. According to Tung (1981) the managers relational abilities have proven to be crucial for the success of the foreign assignment, however, companies do often fail to assess the candidates skills in that area. The advantages and disadvantages of PCN, TCN and HCN managers are summarized in Table
2.2.
Table 1.2 Advantages and Disadvantages of PCNs, HCNs, and TCNs
Source: Adapted from Dowling and Welch (2004)
[25]

STAFFING POLICIES OF SWEDISH MNCs
LITERATURE REVIEW
Here the conceptualization of the research questions is presented; the conceptual framework consists of the most relevant theories reviewed in the literature study and will later serve as a foundation during the process of collecting empirical data. Miles and Huberman (1994) defined what a conceptual framework does as it “...explains either graphically or in a narrative form the main things to be studied –the key factors, constructs or variables- and the presumed relationship among them” (p.18). Each research question will be conceptualized, and after that the relationship between the three research questions will be graphically displayed.
The first research question concerned how factors that influence the staffing decision can be described, therefore the first section will show theories that bring out those factors and thereby conceptualize research question one. In the next section theories that concern the selection process for top managerial positions on foreign markets will be presented in order to conceptualize research question two. After that the key motives for local recruitment as opposed to dispatching expatriates from home is presented and through that the third research question is conceptualized. Finally, the relationship between these three conceptualized research questions will be displayed graphically, which will form the conceptual framework of this thesis.
2.5.1
Conceptualization of RQ1: How can the factors influencing staffing decisions for key managerial positions for foreign markets be described?
The staffing decision of a MNC is influenced by a number of factors. This thesis will study factors that influence ‘who’ the organization later will take into the candidate pool during the selection process. The aspect of the organization’s mindset along with the motive for international transfer is of importance. The mindset of the organization will be determined by analyzing the empirical material through Perlmutter’s (1969) framework where organizations are classified as ethnocentric, polycentric, or geocentric. The mindset of the organization determines ‘where’ the organization will search for candidates, whether they favour the use of
PCNs, HCNs, or TCNs in top managerial positions in foreign markets. There are many reasons as to why organizations engage in international transfers, and in order to analyze the motive for MNCs to do this, Edström’s and Galbraith’s (1977) frame of reference will be applied. Edström’s and Galbraith’s (1977) three main motives for organizations to engage in international transfer is to; fill positions, develop managers, or develop the organization itself.
Together the factors from Perlmutter (1969) and Edström’s and Galbraith’s (1977) will be applied in order to determine MNCs approach to potential candidates that later will be taken into consideration in the selection process which is reviewed in RQ2. Table 2.3 show the factors that influence the staffing decision.
[26]

Table 2.3 Factors that influence the staffing decision
Source: Author
STAFFING POLICIES OF SWEDISH MNCs
LITERATURE REVIEW
2.5.2
Conceptualization of RQ2:
How can the MNC's selection process for top managerial positions for foreign markets be described?
The selection process for international managerial positions in foreign markets will be analyzed foremost through two theories. Firstly it will be viewed through Tung’s (1981, 1998) conceptualization of the selection process which consist of the different steps displayed in the flowchart on p.13. How the actual selection process for top managerial positions in foreign markets is conducted will be reviewed via Black’s et al.
(1999) five step selection process framework. Then Harris and Brewsters (1999) typology of the international manager selection systems will be used as a frame of reference to determine how the selection process within
Swedish MNC’s for top managerial positions on foreign markets can be described. Table 2.4 show the aspects that will be considered in order to determine the selection process for top managerial positions in foreign markets.
Table 2.4 The Selection Process
Source: Author
[27]

STAFFING POLICIES OF SWEDISH MNCs
LITERATURE REVIEW
2.5.3
Conceptualization of RQ3: How can the motives for host-country local recruitment as opposed to dispatching of expatriates from the MNC’s home country or third-country be described?
MNC’s today have the option of recruiting locally for top managerial positions as opposed to dispatching expatriates from the home country or a third-country, the motives to this is what is examined through research question three. Firstly the role of the manager will be determined by using Harzing’s (2001) allegory of the ‘bear’, ‘spider’, and ‘bumble-bee’ this is connected to that different situations require different managers and the role of the manager will create an motive for ‘who’ the organization is looking for . Secondly, Tung’s (1981,
1998) theories regarding that technical competence and personality traits of the manager along with environmental variables are the foremost aspects that influence the selection process will be considered. This is because depending on which factor that is be emphasized, the selectors will look to fill the position with a HCN, PCN- or TCN manager. Thirdly, the seven factors that can serve as motives to why the company decides to hire a host-country national as opposed to a parent- or third-country national will be taken into consideration. The factors themselves are not motives but the importance that the organization ascribes to these factors creates a motive to recruiting a HCN- or a PCN-/TCN manager. The selection of these seven factors has been done based on the literature review that has been conducted. Table 5 display the factors that will be studied in order to determine the motives for MNCs to recruit
HCN managers as opposed to PCN- or TCN managers for top managerial positions in foreign markets.
Table 2.5 Motives for Recruiting a HCN manager as Opposed to a PCN- or TCN manager
Source: Author
[28]

STAFFING POLICIES OF SWEDISH MNCs
LITERATURE REVIEW
2.5.4
Thesis Conceptual Framework
On the following page the conceptual framework of this thesis is presented graphically. The conceptual framework illustrates how RQ1 and the factors that influence the staffing decision as it determines where the organization will look for potential candidates to take into the selection process. A description of the selection process, which is the aim with RQ2, is constructed via the 5 step selection process for specific assignments and also factors that are sought after in manager; technical, personality traits together with an analysis of environmental variables. The selection process for top managerial positions in foreign markets is also reviewed in the light of ‘The Typology of International manager Selection process’ where the openness of the selection process is put in relation to the formality of the organization. This is done as the design of the selection process is will affect the likelihood of a PCN-, HCN-, or TCN manager being selected.
RQ3 present the factors which, depending on their importance for the specific assignment and organization, result in the motives for the company to recruit a manager locally as opposed to dispatching one from home is analyzed, this is done through the seven factors which was located during the literature study and during the conceptualization process of RQ3. The aspects of RQ1, RQ2, RQ3 will, together with the literature taken in consideration, shape a conceptual framework which will lead to gaining a deeper understanding to the staffing policies of Swedish MNCs. The conceptual framework of this thesis is graphically displayed in Figure 2.7.
[29]

STAFFING POLICIES OF SWEDISH MNCs
LITERATURE REVIEW
Figure 2.7 Thesis Conceptual Framework
Source: Author
[30]

STAFFING POLICIES OF SWEDISH MNCs
METHODOLOGY
In this chapter the methodological framework that has been applied in order to collect and analyse data will be reviewed. First the research purpose is clarified, thereafter the research approach and strategy is explained. After that the process in which data is collected will be discussed following a presentation of the applied analysis method. In the end of this chapter there will be a discussion regarding the reliability and validity of the study.
The purpose of this thesis is to gain a deeper understanding to the staffing policies of MNCs for top managerial positions. Robson (2002) distinguished three purposes of conducting research; explorative which is considered as ‘looking around’ and concerns finding out what is happening, finding new insights, asking questions, or studying a topic from a new angel; descriptive is when the research aim at accurate depicting people, events or situations; explanative is the research purpose when the study aim at gaining an explanation of a situation, usually in the form of causal relationships (Robson, 2002).
As the purpose of this study is to gain a deeper understanding to the staffing policies of
Swedish MNCs for managerial positions in foreign markets a theoretical framework of existing theories was developed. There are some explorative influences to be found. However, since the overall purpose of this study is to gain a deeper understanding into the staffing policies for managerial positions of real operating Swedish MNCs in foreign markets which will be done by investigating how various factors affect the staffing strategy and how motives influence if the companies decide to dispatch from home or hire locally the main research purpose of this study consequently is descriptive .
There are two overall approaches to conducting research; induction or deduction (Saunders,
Lewis & Thornhill, 2007). If a study is of inductive nature the data is first collected and then, after analysing the data theory is developed. If the approach is the opposite, that a theory or hypothesis is first developed and later a research strategy is developed in order to test the theory the approach is deductive (Saunders et al.
, 2007). In this study, existing theories have created the framework through which the collected data were analyzed; therefore, a deductive approach was applied to the study. Analyzing previous research on the thesis topic provided a better understanding to the underlying factors and motives affecting the staffing policies and selection processes of Swedish MNCs.
The researcher must also determine the approach to the empirical data. According to Byman and Bell (2005) the nature of a research can be either qualitative or quantitative. The difference between them is that in a qualitative research, the emphasis is often on words rather than numbers and is therefore likely to be inductive and interpreting.
[31]

STAFFING POLICIES OF SWEDISH MNCs
METHODOLOGY
Due to that qualitative data emphasizes on words rather than numbers and is preferable when dealing with human activities and small scale research, this study consist of first and foremost qualitative data. In the final chapter of this thesis the conclusions drawn are presented, they are the result of analysis of the data collected during the interviews, that material is full of values, beliefs and perceptions and is therefore not quantifiable. This is in the lines of
Denscombe (2000) who stated that a qualitative approach is favourable when the study concerns human activities and behavioural patterns and when small scale research is concerned.
There are several different research strategies and according to Yin (2003) they include experiments, histories, surveys, archival analysis and case studies. This thesis aim at analysing the staffing policies of Swedish MNCs and gaining a deeper understanding into this area, because of this, a case study was the best suited strategy. Case studies can be conducted by one, a single, or by several, multiple, case studies. When a multiple cases are considered the findings are often perceived as more convincing than those of single case studies, however multiple case studies are also more time consuming than single case studies. The benefit of choosing to conduct a multiple case design instead of a single one is an increased possibility of delivering a good case study (Yin, 2003).
Case studies are also recommended when the research aims at answering ‘how’ or ‘why’ questions (Yin, 2003), which this study does. Further, this study aim at investigating as to which extent the findings in one case is related to the findings in another. Saunders et al .
(2007) argue that when applying a multiple case study strategy it is possible to establish whether the findings in one case are related to the findings in the other studied case. In a case study it is possible to use a number of methods to collect data; those methods will be explained under the section for data collection. The research purpose of this study as well as the research approach is in accordance to a case study strategy.
Miles and Huberman (1994) raised the complexity of the issue that researchers cannot study all aspects of an issue. Researchers conducting quantitative studies do therefore limit themselves to one aspect of the issue in order to there by create a deeper understanding of the research problem. The area of staffing strategies is widely researched in literature, however, the factors and motives that affect the selection process for Swedish MNCs is lacking in present literature. In the light of this, this study will collect empirical data from the aspect of
Swedish MNCs. The companies that will participate in this study are IKEA, Atlas Copco,
SKF and Sandvik. The selection of companies was based on that they all are large Swedish companies that have been operating on the global market for a long time. The selection was further conducted with companies from different industries in order to increase the generalizability of the results to other Swedish MNCs.
[32]

STAFFING POLICIES OF SWEDISH MNCs
METHODOLOGY
The respondents from each company were selected through contacts with the organization’s student relations managers which forwarded the participation request to the concerned parties.
The respondents were; Niklas Safi (Assistant Global Human Resource Manager, IKEA),
Nadim Penser (Vice President for Human Resources, Division of Surface Drilling Equipment,
Atlas Copco), Eva Hansdotter (Senior Vice President of HR and Sustainability, SKF), and
Holger Wiklund (Vice President of Human Resources, Sandvik Tooling).
The collection of empirical data for case studies can be done through six commonly used sources of evidence: documentations, archival records, interviews, direct observations, participant observations and physical artefacts (Yin, 2003). According to Yin (2003) interviews are considered the most important method when it comes to collecting empirical data for case studies and that the benefit is that it allows the researcher to be focused on the specific research topic. There are three types of interviews such as open-ended, focused and survey. In this study open-ended interview were applied since the respondent, or as in this case the respondent has more freedom in how to answer the questions; such questions could for example concern respondent’s opinion on a specific topic. Further, the open-ended interviews in this study were semi-structured which mean that they were based on an interview guide which provided a pre-prepared list of questions. This approach allows the respondent to answer freely to the questions and develop the answers further but still provide a framework which result in that comparable answers from all participants in the study.
The interviews in this study were conducted by telephone; the foremost reason for this was the geographical distance. The interview guide was sent to the respondents in advance so that any uncertainties regarding the questions could be cleared out before the interview took place.
The interviews were recorded and lasted during 30-45 minutes. However, because phone interviews were chosen over face to face interviews it affected the generated material. This is further going to be discussed under the section ‘Quality standards’. Yin (2003) point to that additional information should be gathered from other sources, and stated that documents are likely to be relevant to every case study topic and are useful even though they are not always accurate and may be biased. Data concerning the companies has therefore also been gathered from the companies’ WebPages and annual reports.
The analysis of case studies can, according to Yin (2003), be carried out in two ways; withincase analysis and cross-case analysis. In a within-case analysis the collected data is compared to relevant theories while a cross-case analysis is conducted when the collected data from several cases is compared. In this study both within-case analyses and a cross-case study is conducted. First a within-case study of each case is preformed when the empirical data from each case is compared to the relevant theories and analysed through the conceptual framework, this provided a great image of what companies do in reality compared to what
[33]

STAFFING POLICIES OF SWEDISH MNCs
METHODOLOGY they do in ‘theory’. After reality was compared to theory the cases in this study were compared with one another, this was done in order to determine to which extent they differ and whether or not or to which extent the findings can be generalized to further companies.
According to Miles and Huberman (1994) the processing of qualititative data consists of three parts; data reduction is when the collected data is arranged and focused so that relevant conclusions can be drawn from them; data display simplify the decision of either analysing the data further or enable the researcher to move on; conclusion drawing and verification starts already at the beginning of the data collection process and are verified continuously as the research proceeds. The recommendations from Miles and Huberman (1994) have been taken into consideration during the process of collecting empirical data and analysing it. From the beginning of the process when data was first collected conclusions have been drawn, in the beginning they were vague and unclear but became towards the end more grounded and distinct and ultimately landed in the final conclusions of this thesis. The conclusions drawn have, in the lines of the work of Mile and Huberman (1994) been constantly tested for their plausibility, durability and conformability. This was followed in order to constantly verify that the conclusions drawn from the collected data was valid. The concept of validity is further explained under the section ‘Quality standards’.
In this study, as in any other research, there is always a degree of subjectivity when it comes to interpret the generated material. This indicates that there is no guarantee that another researcher would draw the same conclusions as the author of this thesis. The validity of the study determines to which extent the researcher measures what was intended to be measured
(Denscombe, 2000). Reliability is a measurement of to which extent the study would conclude in the same findings if repeated and thereby yield consistent results (Denscombe, 2000). In this study the empirical data was collected through interviews with different people from each organization. As the researcher, as well as the respondents, is individuals this creates interrelationships between the individuals which affect the possibility of generating the same results with another researcher or other respondents. However, to decrease the possibility of the interviewer influencing the respondents the interview guide was followed consistently.
Further the reliability is decreased since this is a case study consisting of four cases; generalizable conclusions are thereby limited due to the number of cases.
In order to increase the validity of the study the conceptual framework has been developed in light of the purpose of this study. To further strengthen the validity a multiple-case study consisting of four companies from different industries has been conducted. These companies have provided valuable information regarding the staffing policies of Swedish MNCs and the interviews with each respondent was recorded in order to increase the validity and reduce the risk of pass over important information. The fact that the interviews were tape recorded further allowed the researcher to be fully focused on the interview and ask relevant attendant questions instead of taking notes and this enabled an increased validity.
[34]

STAFFING POLICIES OF SWEDISH MNCs
METHODOLOGY
The interviews were conducted in a semi-structured way through an interview guide, in order to increase the reliability, and thereby the possibility to repeat the study, the interview guide is enclosed in Appendix A. To enable an increased reliability of the study the interview guide was sent to the respondents in advance so that any questions that were indistinct or misleading could be clarified before the actual interview. The interviews were conducted in Swedish as it is the native language of the respondents, however in order to avoid translating errors a translated transcript of the interview was sent to the respondent so that he/she could confirm the information.
[35]

STAFFING POLICIES OF SWEDISH MNCs
EMPIRICAL DATA
In this chapter the empirical data collected from each of the four case companies is presented. Each case presentation is divided into four sections, first a background to the organization in general and international staffing in particular is provided, followed by factors influencing the staffing decision. After this the selection process is reviewed, and finally the motives of recruiting a HCN manager as opposed to a PCN-/ TCN manager are displayed.
The story about the Swedish’s furniture retailer IKEA began in 1926 when Ingvar Kamprad, its founder was born, even though IKEA, the company, was not founded until 1943. The name
IKEA come from the founders initials, IK, and E as the first letter of the name of the farm where he grew up and the A come from Agunnaryd, the name of the village where he grew up. Anyone can manufacture high quality products at a high price, or low quality products at a low price. However, manufacturing high quality products at a low price is a challenge which requires innovative solutions and that has been the focus of IKEA since the founding of the company. IKEA’s concept is manifested on its home page as:
” …offering a wide range of well designed, functional home furnishing products at prices so low that as many people as possible will be able to afford them. Rather than selling expensive home furnishings that only a few can buy, the IKEA Concept makes it possible to serve the many by providing low-priced products that contribute to helping more people live a better life at home.” (ikea.com)
An important part of IKEA’s concept is the aspect of “flat packages”, the idea came from one of IKEA’s employees who unscrewed the legs of a table in order to be able to transport it without damaging it. The main advantages of flat packages are that there is less space needed for storage and the numbers of transport damages are reduced. (ikea.com)
The logotype of IKEA is yellow and blue, just like the colours of the Swedish flag, and that is no coincidence, IKEA guards its Swedish roots. In the beginning IKEA sold everything from matches, watches, and picture frames to pens and pencils, furniture was not introduced into the company’s range of products until 1948. In 1951 the first IKEA catalogue was published and by 1959 IKEA’s 100 th
employee was hired. The first IKEA store opened its doors in
Älmhult 1958 and opens today about 15 new stores each year. The first store that IKEA opened outside the boarders of Scandinavia was opened in Zürich, Switzerland, in 1973. The success in Switzerland lead to that IKEA in 1974 opens its first store in Germany which today is IKEA’s largest foreign market. In 1976 Invar Kamprad’s The Testament of a Furniture
Dealer was published which documented the vision and business idea of IKEA and it has had, and still has, a strong influence of the development of the corporate culture within the company. Today IKEA has more than 123 000 employees and their annual sale exceeds 21.5 billion Euros. There are more than 300 IKEA stores around the world today and the IKEA group is present in 44 countries with a total number of 268 stores, the rest is handled by franchisees. (ikea.com)
[36]

STAFFING POLICIES OF SWEDISH MNCs
EMPIRICAL DATA
IKEA is present in many parts of the world, and the corporate brand is built around its
Swedish heritage. The average country manager for IKEA is difficult to describe due to that diversity is something which is emphasized within the organization. However, it is more common that it is a male than a female manager and that the manager often has previous experience of the retail industry or supply chain management.
Empirical data for this study was collected through a phone interview with Niklas Safi who is
Assistant Global Human Resource Manager at IKEA, that is what his contract names his position, but at IKEA they prefer not to work with formal titles within the organization.
Niklas Safi has worked at his present position for about 2 years and has been within the organization a bit more than 5 years.
Factors Influencing the Staffing Decision
IKEA’s formal organization consists of a matrix organization which covers all operations worldwide within the Group, and this is also tied to that IKEA is a franchise company and the concept must be the same in all markets. The country manager has the uttermost responsibility of the operations within the specific market and reports to the regional retail manager that in turn report to the board of directors. The organization is not very formalized, IKEA prefer not to work with ‘titles’ and pre-defied organizational structures, although this is something which is currently being reviewed. Operations in foreign markets are performed by managers who are familiar with IKEA’s concept and the informal organization is emphasized. One of the tasks for the country manager is therefore to be a carrier of the corporate culture between different markets, and IKEA emphasize that top management should ‘practice what they preach’. IKEA defines itself as geocentric as the nationality of the country manager is not something which is emphasized during the recruitment process.
IKEA still perceive themselves as a ‘Swedish company’ in the foreign market, but believe that the nationality of the country manager do not disrupt the communication of the IKEA values, further a global perspective of the managers is promoted. The need to recruit a new country manager is brought to light from the market/ country where it is needed, however the global human resource department is in contact with the managers and thereby often have a ‘hunch’ of when someone is about to relocate and there will be a need for a new manager. The recruitment decision is made in collaboration with the human resource department, the regional retail manager and the board of directions. IKEA see the international experience which the country mangers gain as invaluable when it comes to developing future managers for the organization.
Global Selection Process
Cultural differences between Sweden and countries which IKEA operates in are something which they consider during the selection process. The lack of cross-cultural skills can exclude a candidate from the selection process even though he/she possesses the technical skills demanded in the job description. IKEA has English as a corporate language and this decreases the importance of knowledge in the local language. The country managers communicate with headquarters via regional managers who are responsible for a number of countries.
[37]

STAFFING POLICIES OF SWEDISH MNCs
EMPIRICAL DATA
Experience from the specific market is not a requirement criteria in the selection process even though previous international experience is something that would facilitate the adjustment for the manager once present in the market. IKEA utilize the position as Deputy Country
Manager to develop future Country Managers as it provides an excellent training base for future international assignments. Because of this an important selection criteria is previous experience, IKEA see previous results achieved by the candidate as a good indicator of expected success in the foreign market. The previous results of the candidate also provide a fair assessment of the individual’s technical skills.
IKEA has a wish to have a fully open and transparent selection process, where all available positions are posted so that anyone who is interested can apply. However, today the selection process for top managerial positions is based on personal recommendations that determine which candidates that are evaluated further. The selection team consists of the IKEA Group’s
Board of Executives together with the global HR department and it is that network that can pinpoint potential candidates, at present they have no database that gathers high potential candidates even though they have identified them within the organization. The selection criteria do vary depending on host country conditions and this is something which IKEA take into consideration during the selection process. The personal characteristics of the candidates are evaluated through assessment centres, interviews and references.
Motives for HCN recruitment as opposed to PCN/TCN recruitment
The fulfilment degree of the task of the country manager is measured by a number of key figures which the country manager report directly to the board of directors several times a year. The task of the country manager will vary depending on if it is a new market for IKEA or if they have been present on that specific foreign market for some time, if it is a new market there is a stronger emphasis on control aspects. One of the tasks in a new market is to establish the corporate brand while it in another market might be to penetrate deeper into the existing market, this is connected to replacing centralized decision making. The expenses connected to sending an expatriate abroad is something which IKEA consider during the selection process, and the selection decision is based on cost estimating together with future potential revenues from entering a new market. At IKEA they see no relationship between the age of the subsidiary and the age of the country manager, they emphasize that competence is what matters and that age itself is no competence. IKEA neither find the aspect of the nationality of the manager of interest, they have therefore no statistics of how many expatriates that are working as country managers ‘outside’ their home market. The average country manager stays for 3-5 years, it is important that the manager remain in the position for at least 3 years, otherwise it is hard to have the time to accomplish any visible results. It has happened that a manager has been sent on a mission in a foreign market for such a short period as 6-12 months; however this is not a common solution. IKEA do not analyse whether the time that a domestic country manager remain in position differ from the duration that an expatriate country manager would stay in the foreign market. The political climate in the host country and laws and regulations affect the decision of whom IKEA send as a country manager to a specific market, more specifically this affects the selection criteria that are
[38]

STAFFING POLICIES OF SWEDISH MNCs
EMPIRICAL DATA considered during the selection process and often go into the personal characteristics of the manager whether he/she needs to be extremely tactful or firm and persistent.
The Atlas Copco group describes itself as a world leading provider of industrial productivity solutions. The Group was founded in 1873 and has been operating in the same line of business ever since then. The products and services that the Atlas Copco group offers varies from a range of compressed air and gas equipment to construction and mining equipment and industrial tools and assembly systems. In order to increase the productivity of their customer’s operations the Atlas Copco group work in close cooperation with its clients and business partners. The headquarters are located in Stockholm, Sweden, but the Atlas Copco group manufactures products in more than 20 countries. Globally the group is present in more than
160 countries and this because their products are sold and rented under different brands via a worldwide sales and service network. In 2008 there were 34 000 employees in the group and they presented a turn-over of BSEK 74. The vision of Atlas Copco is to be “First in Mind –
First in Choice®” and thereby be the natural choice for both present and future customers which applies to all three business areas which Atlas Copco operates in; Compressor
Technique, Construction and Mining Technique, and Industrial Technique. Atlas Copco has a strong position on the global market and focus on strengthening its position within the segments where it has its core competence. (atlascopco.com)
In order to achieve its vision the Atlas Copco Group has three overall strategic directions;
Organic and acquired growth, Strengthened aftermarket, and finally Innovations and continuous improvements. The strategies for the whole Atlas Copco Group, processes, and shared best practices have been gathered in the database “The Way We Do Things”. The information which is stored electronically and available to all employees include process information regarding finance, controlling and accounting, as well as legal, people- and crisis management, and also guidelines regarding insurance, communication and branding. The database also includes Group standards, Business Code of Practice and environmental management. Independent of where in the world they are located Atlas Copco employees are expected to act according to these principles and guidelines. (atlascopco.com)
The business area of Construction and Mining Technique is further divided into eight divisions, and one of them is Surface Drilling Equipment. The Atlas Copco Group has approximately 400-450 subsidiaries and affiliates in foreign markets, and out of those 12 belong to the Division of Surface Drilling Equipment. The average manager for a company within the Group has the overall responsibility for the balance sheet and the profit and loss of that company. The manager also has the overall responsibility for the ongoing operations and this makes Atlas Copco a much decentralized company where the managers must take responsibility for results, operations and people. Most of the units within Atlas Copco are sales companies, the manager’s mission is therefore to develop the business and develop relations with customers locally. The average manager therefore must possess the capacity
[39]

STAFFING POLICIES OF SWEDISH MNCs
EMPIRICAL DATA and personality to develop the organization, develop the business operations and develop the people within the organization in order to generate lasting results.
Empirical data for this study was collected through a phone interview with Nadim Penser who is Vice President for Human Resources at the division of Surface Drilling Equipment and has had his current position for 15 months but has been working within the Group since 1992.
Factors Influencing the Staffing Decision
The training and education of the manager facilitate the transmittance of the corporate culture across national borders. However, another important factor is that many managers who have been working internationally for the group during many years transfer the knowledge of their previous experiences between cultures as each person becomes a bearer of the Atlas Copco culture. Even though the organization is decentralized, the different units around the world are connected through a red thread which ties back to the Atlas Copco culture. The organization of Atlas Copco has a certain structure which is incorporated in ‘The Way We Do Things’ that provide a framework for the organization to be flexible within; Atlas Copco refers to this as
‘freedom with accountability’.
Atlas Copco did up until the late 1980’s have a rather ethnocentric approach to staffing, where
Swedish managers held most top managerial positions in foreign markets. Today the top managerial positions within the organization are possessed by a wide range of nationalities and they have a more geocentric approach to staffing. Today the skills of the manager determine who gets selected and nationality is not of importance, Atlas Copco has approximately 320 expatriates within the group that comes from 40 different countries and can be found in 50 different markets. The recruiting manager has the final word and has the ultimate decision responsibility for who gets hired, even though the human resource department at Atlas Copco is constantly involved in the process their power is limited. Within
Atlas Copco, staffing decisions are handled in the same way as other investment decisions - that is, with General Managers needing Division President approval
Atlas Copco describes its culture is as strong and rather well defined, it is therefore that culture which is spread throughout the groups global operations rather than that they adapt to the local market conditions. The corporate culture of the group originates from the Swedish value and belief system, however this does not imply that Atlas Copco want everybody to behave as if they are Swedish but rather that they behave according to the guidelines that are gathered in the database “The Way We Do Things”. Atlas Copco is a much decentralized organization, but what brings together the different units around the world are the common principles and guidelines, the values and beliefs that are gathered in the database which is easy accessible for all units globally.
Global Selection Process
During the selection process the focus is not on the candidate’s cultural background but rather finding the ‘right person’ and having them in the ‘right place’. Atlas Copco does not focus on the people that they want but rather on the profile and determine the skills that would be necessary to succeed with the position. Cultural difference is a factor which is considered when there are vast cultural differences between the host-country culture and the culture of
[40]

STAFFING POLICIES OF SWEDISH MNCs
EMPIRICAL DATA the candidate’s home country. Previous international experience is not a must condition, however knowledge of the specific market can be an advantage for the candidate during the selection process. It is important that the candidate show potential to develop the business in the foreign market in the desired direction. There is no single focus on technical skills since they approach talent from a broad perspective and technical skills is only one dimension. An important selection criterion is the previous achieved results of the candidate which can determine their ability to achieve long term sustainable results.
Within Atlas Copco they work with something as they refer to as ‘The High Potential
Process’ where individuals within the group that not only have the capacity to take on greater responsibility but also the motivation, and perhaps are willing to move international are registered. This database is updated on a yearly basis when each local general manager leads the process in the country to acknowledge people who are high potentials at different levels of the organization. This is something which Atlas Copco does to ensure a future demand of successful international business managers. This database can also be used as a supplement in the selection process where the recruiting manager can see how the applicant is reviewed by his/ her current manager. However, managers below Division President level do not have this access, other than for people in their own organisation. But Division Presidents / Division HR
Managers can support General Managers by providing input about High Potentials. Atlas
Copco does not want to work with headhunting and do not use the database to find candidates, and this also mean that personal recommendations play very little role. However, if someone has applied for an available position and they are present in the database they are given a bit more attention during the selection process.
Knowledge of the local language can be an important selection criterion if the local knowledge of English is very poor, this because Atlas Copco work in close corporation with its customers. Atlas Copco’s corporate language is English and knowledge of that is essential for someone to be considered for a top managerial position. When the general managers abroad communicate with headquarters in Sweden they used language is English. However, due to Atlas Copco’s organizational structure headquarters play a small role in operations.
The selection process is formalized and the general manager selection process starts with that the division president and the division HR department together develop the assignment profile. After this HR publish it on the internal job market, which is done internally through their global intranet and lead the selection process. If a suitable candidate cannot be founded internally the vacancies will be announced externally as well. The HR representative and the division president review all applicants together and interview a few, first through telephone, and then approximately three candidates are interviewed face-to-face. A personality profiling tool is used as a complement to the interviews.
Within Atlas Copco there is a process for approvement of all recruitments within the group, according to their guidelines all jobs above the level of general managers, and also available positions on the level below, must be advertised on the ‘international job market’. This means that anyone within the group can see all vacancies through their intranet, and the employees are actively encouraged to apply to positions which they find interesting, has a relevant
[41]

STAFFING POLICIES OF SWEDISH MNCs
EMPIRICAL DATA background to and has the motivation to take. The final selection decision the recruiting manager's own boss has to approve according to the ‘grandfather principle’, which mean that the recruiting manager makes the recommendation but it is the recruiting managers boss who need to approve it in order to make a balanced decision. The division president would also share the decision with the other Division Presidents, this due to that the other divisions will also have contact with the general manager.
Motives for HCN recruitment as opposed to PCN/TCN recruitment
Atlas Copco do not use the concept parent-country, even though they are a Swedish company they are very international and see themselves rather as global than Swedish. Within three months after that the position is filled the appointed general manager will receive a ‘mission’, which is done in accordance with the Atlas Copco guidelines. The mission involves a confirmation of what the expectations are at a high level of a 2-5 year period where the manager will not only be able to show results but also strategies and activities preformed in place in order to develop the business in line with the mission. The business board meetings where the general manager’s fulfilment of the mission is evaluated takes place 2-4 times each year and are lead by the division president. The managerial role is partly depending on the age or maturity of the operations in the foreign market. In a smaller immature organization there are greater demands on the tactical skills of the general manager and the manager must possess great knowledge him-/herself and not be afraid to get their hands dirty.
The cost of sending expatriates to foreign markets can have a bearing of the final decision in the selection process, however, within Atlas Copco there is a culture and understanding that they need to have expatriates in order to develop global knowledge within the organization.
Atlas Copco aim at having ‘the right person in the right place’ and is therefore willing to pay more if that is necessary. Having expatriates that will remain in the position for a limited period of time is also in line with Atlas Copco’s requirement for a flexible organization where mobility is something that is rewarded. The average general manager stay in position 4.5-5 years and that is the same as the average expatriate and this to keep up a flexible, healthy organization. If the general manager stays for shorter than 4 years then it is disruptive as it becomes difficult to create long lasting results and if the manager stays longer than 5 years the manager can start to get into complacency.
Governmental rules, policies and regulations have a marginal effect on the final staffing decision for Atlas Copco and the primary focus in the selection process is competence, however in some markets the decision can be affected but those markets are so few that they do not affect the general staffing policy.
The SKF Group describes itself as one of the world’s leading global suppliers of solutions, products and services within rolling bearings, seals, mechatronics, services and lubrication systems. SKF was founded in 1907 and it did not take long time before it had established itself as a global company. By 1920 SKF was present in Europe, America, Australia, Asia and
Africa, today SKF is represented in more than 130 countries and has more than 100
[42]

STAFFING POLICIES OF SWEDISH MNCs
EMPIRICAL DATA international manufacturing sites. The vision of SKF is to “equip the world with SKF knowledge” and the mission is “to be the preferred company for customers, distributors, suppliers, employees and shareholders” (skf.com). The SKF strategy is based on the organisations core values which is; High ethics, Empowerment, Openness and Teamwork.
SKF’s operations are divided into three divisions, which each focus on a specific customer segment. There is interdependence between the divisions as they form a market within the
SKF group consisting of products, services and know-how, through which they provide each other with the opportunity to allow any of the divisions to serve its final customers. This enable SKF to develop tailor made offers for each customer segment in order to improve the customer’s performance. The three divisions are Industrial- , Service-, and Automotive
Division.
The Industrial Division which is divided into 30 customer segments serves Original
Equipment Manufacturer customers with product development and production of bearings.
The Service Division provide the global industrial aftermarket with products and knowledgebased service in order to increase the customers’ plant asset efficiency. This is done mainly through a distributor’s network of 7000 members. The Automotive Division provide manufacturers of cars, light trucks, heavy trucks, buses etc. in addition to that it also serve the home appliance market for power tools. (skf.com)
Today SKF has approximately 120-130 subsidiaries or affiliates around the world in about
100 countries. Within the SKF there are 185 expatriates that create more than 120 different country combinations and there is a frequent use of third country nationals. SKF is different from other Swedish MNCs since they were not a big Swedish company who in the last couple of years has gone international, by the time of the First World War SKF was present on all continents around the globe, SKF has had expatriates within the organization since the start.
The organizational structure of SKF is not based on different countries but rather on the three different divisions according to operational areas. The role of country manager within SKF is not an operational position but rather an umbrella function to coordinate the different resources within one geographic region. The country manager role is more to ensure that the
SKF operations in the specific market follow the company code of conduct from a governance perspective. Often the role of country manager is a side-line position that one of the sale managers hold but in the six biggest markets SKF has a specific country manager who works fulltime with the umbrella function. In emerging markets the country manager has further responsibility as one of the assignments is to determine future business opportunities etc.
Empirical data for this study was collected through a phone interview with Eva Hansdotter who is Senior Vice President of HR and Sustainability at SKF and has had this position for five and a half years but has been working within SKF for 22 years.
Factors Influencing the Staffing Decision
In “The SKF Commitment” it is described who SKF is along with the vision, mission, code of conduct and values and drivers. The SKF Commitment is the foundation for how SKF is
[43]

STAFFING POLICIES OF SWEDISH MNCs
EMPIRICAL DATA managed all around the world and summarize the corporate culture and is an important tool in the strategic management process. However, the managerial style is adapted to local market conditions depending on the maturity of the market; in an immature market the country manager becomes more involved in the actual business operations than in a mature market such as the European markets. Within the SKF organization roles are clearly defined along with role responsibilities and the organization is formalized. However, due to that the work which SKF conduct is in close corporation with its customers the organization can differ slightly between the divisions in order to correctly reflect its customer segments, for example the automotives division has few but large customers whilst the industrial division has almost
2 million customers of varying size. This organizational structure is not nation limited but work across national borders and this result in that most managers has a international responsibility, the only level that is limited by national borders is manufacturing at factory level.
The managers within SKF have constant access to the SKF Commitment via the internal intranet but are also trained and educated in what the document actually signifies. The SKF
Commitment is also taken into the work environmental analysis which is conducted annually.
The focus of the review is not only on ‘what’ is achieved but SKF emphasize on ‘how’ it is done to ensure that it correlate with the guidelines in the commitment document.
When SKF enter a new market it is often a Swedish manager, or a manager from one of their more mature markets, who initialize the operations with the goal to after some time hand over the operations and leadership to a local manager. SKF apply a mix of ethnocentric and polycentric approach to staffing. When there is a need to find a new international manager the
HR department at SKF work with long-term planning and are often aware of the need to find a manager in advance, this enables them to take it into consideration during their talent management assessments.
Previously the reason behind international transfer of managers was foremost the need to transfer knowledge to other countries and regions whilst today the foremost reason for SKFs international transfers is connected to mobility. The classic expatriate at the time was a senior person with great knowledge of SKF, today the expatriate is younger since one aim is to develop the individual further and another to establish both formal and informal networks within the organization at an early stage in the career. Previously SKF worked with succession planning, where they evaluated the available positions and the available candidates, but realized five years ago that it was not enough to be able to foresee all needs for future international managers.
Today SKF work the other way around and look at the management potential they have in the organization and see how they can develop to one of SKF’s 300 global key managerial positions. SKF has created a pool for management successors, for example ‘management in
China’ or ‘factory managers’, the pool’s do not describe the available positions today but rather the future need of managers in relation to SKF’s overall strategy. SKF also work with assessing the level below the management successors pool, which are the individuals that
[44]

STAFFING POLICIES OF SWEDISH MNCs
EMPIRICAL DATA today do not possess the skills to take on one of the key managerial positions, but that SKF estimate has the potential to do so over time.
Global Selection Process
When SKF go into a new market they will send a manager which is familiar with the SKF culture from one of their more mature markets to develop the emerging market with a goal to eventually transfer the leadership to a local manager. When SKF today select a new manager for a European SKF division, cultural differences is not something that is taken into consideration, this is because today the different divisions across Europe are very similar in terms of organization and there is a strong corporate culture. On the other hand, the selection process for managerial positions in foreign markets that differs distinctively from the Swedish market take cultural differences in serious consideration since they often are aware of which
‘type’ of leadership style that is suitable for the specific market.
At SKF the corporate language is English but for international managerial positions that involve close contact with the local customers, such as sales, knowledge of the local language is a must. The communication between the country managers and headquarters are conducted in English via email, telephone on a regular basis, and every other year SKF arrange management conferences when about 250 SKF managers meet and the direction of the organizations global operations is clarified. SKF is a highly networking organization, and there is a strong informal social network between the organization’s members –they all
‘know’ each other.
The overall selection process is formalized and there is a clear determined way of how the process should be conducted. The business unit manager belong to one division but the selection process is not managed by that division alone; the selection process for SKFs business unit managers in foreign markets belong to the group executive board. All positions within SKF should be announced publicly through the intranet, there are exceptions when the positions cannot be advertised but those occasions are extremely rare. The candidates are then measured against a profile of required and desired criteria, the profile focus more on ‘how’ the candidate do things rather than ‘what’ the candidate has done. The selection process do take previous achievements in consideration but then look more into ‘how’ the candidate preformed the task rather than the actual result of the performance.
Each year SKF conduct a leadership review and the result of that is something that is lifted into the selection process. The candidate do not need to meet all the criteria in the profile but through assessing all criteria SKF later know in which areas they will need to provide extra support for the selected manager. Personal recommendations are not a part of the selection process and after the HR department has mapped the candidates according the profile a group of approximately four representatives from the HR department and the group executive board is formed, they discuss and later present a recommendation to the group executive board.
Motives for HCN recruitment as opposed to PCN/TCN recruitment
All managers within SKF participate in a leadership review each year to check how the operations are going; they get to grade their own leadership skills and their skills are also graded by their senior managers, their employees and their colleagues at other business units.
[45]

STAFFING POLICIES OF SWEDISH MNCs
EMPIRICAL DATA
The costs connected to sending an expatriate to a foreign market is something which is taken into consideration in connection to the staffing decision, and the cost must be put in relation to the expected result of the assignment. SKF also has shorter expatriate assignments, when the placement is shorter than one year and the expatriate’s family does not accompany the expatriate. The costs for sending expatriates abroad is at SKF calculated via a ‘build-up model’ where the expatriate salary is divided in two parts, one is to cover the expenses in the home-country during the foreign assignment and the other the expenses in the host-country.
The average contract for an international manager is during a period of 2 years thereafter it is usually extended to 5 years, there are very few managers who only stay 2 years in the foreign market. After 5 years the manager must either find a new position or go into a local contract on the foreign market, this enable the organization to constantly evolve. Governmental rules, policies and regulations do not affect the staffing decision at SKF, if they were to enter a very unstable market is could be something which would be considered, however if the market is immature SKF often use a manager from one of their more mature markets who is familiar with the SKF commitment.
Sandvik was founded by Consul Göran Fredrik Göransson in 1862 and the organization has been built on the same two fundamental values ever since. The first one is innovation and technology and the other is direct contact with customers. Sandviks business concept is to develop, manufacture and market products which can improve the profitability and productivity of its customers, and operations are focused on areas where Sandvik is, or has the potential to be, a world leader. All activities which are preformed at Sandvik are based on these two fundamental values. Sandvik is a high-technology, engineering group with advanced products and a world leading position in selected areas. In 2008 Sandvik presented sales of approximately SEK 93 billion with 50 000 employees globally.
The three core areas of Sandvik is; Tooling which manufacture cemented-carbide and highspeed tools for metalworking applications together with blanks and components made of hard materials such as cemented-carbide; Mining and Construction involves machinery and equipment for rock-excavation; Materials Technology which is stainless and high-alloy steels, special metals, resistance materials and process systems.
Sandvik early became international and in the 1860s when the first agencies were established in Norway, Denmark, Great Britain, Russia, Germany and France. In 1876 Sandvik participated in the World Fair in Philadelphia and the first US sales were booked through an agent. Later in the 1960’s Sandvik opened its first plants in India, Mexico and Brazil and a sales warehouse was established in Singapore. In the 1970’s the internationalization continued with plants in the US and Canada and production of cemented carbide in Japan, and in the mid 1980’s a first representative office was opened in Beijing, China. Today almost two thirds of Sandviks production and more than 95% of its sales takes place outside of Sweden.
(sandvik.com)
[46]

STAFFING POLICIES OF SWEDISH MNCs
EMPIRICAL DATA
According to Sandvik the organization apply a borderless concept and aim to operate locally based on a solid knowledge of local conditions, on the same time the performance should be conducted in the uniform Sandvik manner. In Sweden and Europe Sandvik has its highest number of employees; however the aim is to have a shift towards a more global distribution.
The strategy that Sandvik applies is that sales resources should be local and close to the customers, whilst production and distribution are carried out with a regional perspective. The marketing and R&D of Sandvik is conducted with a regional/global concept.
Sandvik Tooling has a total of 15’000 employees spread out on approximately 200 reporting units globally operating in approximately 160 countries. Within Sandvik Tooling there is a manager for each product area and his/her mission is to further develop the customer relationship and increase sales. Each product area has separate sales units in each market to strategically organize their sales operations, and they even compete with each other towards the end customer. The organizational role of country manager is usually possessed by one of the managers who, as a part of their regular managerial role, take on the role of country manager in order to represent Sandvik as a whole in the foreign market. In India, China and
Russia, Sandvik has country managers who works fulltime, but often the role of country manager is a part-time occupation for a business unit manager.
Empirical data for this study was collected through a phone interview with Holger Wiklund, who is Vice President of Human Resources at Sandvik Tooling and has had this position since
1994.
Factors Influencing the Staffing Decision
Sandvik operate in many different markets and the customer offering is constantly developed in coordination with the demand of the customers. On the other hand the managerial style within Sandvik Tooling’s different product is developed to transcend borders and be global.
The managerial style is built on a leadership capability model that Sandvik Tooling has developed to reflect its overall business strategy. Sandvik Tooling further constantly work with Management Development Reviews (MDRs) where the managers participate in a one day assessment to find strengths and weaknesses in their leadership skills and to determine what needs to be developed further to correlate with the capability model. At Sandvik their internal MDRs play an important role in transmitting the corporate culture across national borders, as the business unit managers meet managers from other units of Sandvik Tooling as well as from other parts of the world.
Ten years ago the staffing policy for top managerial positions on foreign markets was conducted with an ethnocentric approach but today the staffing policy of Sandvik is polycentric and moving towards geocentric. The shift towards geocentric is connected to that the knowledge of the local market is not always connected to nationality.
The aim of Sandvik Tooling staffing policy is to be able to have as many local managers as possible in foreign markets, today approximately 60 expatriates hold top managerial positions within the Sandvik tooling organization. Sandvik has a low turnover rate of employees, approximately 4-5% globally. Sandvik’s HR department has a close contact with the
[47]

STAFFING POLICIES OF SWEDISH MNCs
EMPIRICAL DATA managers who work in foreign markets. On a yearly basis the HR departments conduct an assessment of the current managers to be able to foresee and fulfil future needs of international managers. In this assessment talents within the organization are highlighted as well as a substitute plan if a manager on a foreign market would need to be replaced.
Sandvik has two main purposes for sending expatriate managers abroad; the first is that it is a step in the individual’s personal development plan and the second is the transfer of knowledge across national borders which the use of expatriates can create.
The Selection Process
Cultural differences between the host country and the parent country have a significant effect on Sandvik’s staffing decision for top managerial positions on foreign markets. The corporate language of Sandvik is English, however the aim is that all managers on foreign markets will have some knowledge of the local language. This selection criterion come from that Sandvik previously has had managers on foreign markets that had no knowledge of the local language.
This had a negative impact on the business operations in the foreign market. The communication between the international manager and headquarters is conducted via a mix of telephone, email and personal meetings.
The selection process starts with a review of what was the conclusion in the latest substitute plan that was conducted. Further, a discussion regarding if the specification of requirements need to be adjusted is held, this is done to keep the process up to date. The selection team consists of one representative from HR and the product area manager in question. In Sandvik a grandfather principle is applied which imply that no product area manager can make the decision before their superior manager has approved the recruitment decision. Potential candidates are identified through the yearly assessment which they conduct to trace internal talents. There Sandvik spot individuals who would not only handle a future managerial task well, but that would also benefit from it in their future career.
As a highly technical company the technical skills of the candidate and specific product knowledge become an important selection criterion. The personal characteristics of the individual are other selection criteria taken into consideration and also previously achieved results are looked upon. Sandvik do not use any type of standardized tests or feedback instruments during the selection process, this is however something which they use during the
MDR’s which are conducted on a yearly basis. Previous international experience is important for someone who wants to climb further in the Sandvik Tooling organization.
The selection process at Sandvik is formalized and there is a predetermined line of action starting with the annual MDRs. The aim is that all vacant positions should be announced publicly, however that is not the case in all scenarios some positions are not even announced internally. When this happens it is most often connected to that the recruiting product area manager already has decided on a candidate which the ‘grandfather’ then only has to approve.
The image that the recruiting product area manager has of the candidate has a large impact on the final recruitment decision and therefore personal recommendations play a crucial part in the recruitment process.
[48]

STAFFING POLICIES OF SWEDISH MNCs
EMPIRICAL DATA
Motives for HCN recruitment as opposed to PCN/TCN recruitment
At Sandvik the foremost control method that is applied are the results that each manager produces, in terms of sales and market shares. However, the aspect as to how the manager develop the organization is also evaluated and controlled through to which extent talented individual members of the local organization are encouraged to grow and advance. The networks within the organization are of great importance to Sandvik and its international managers. The past 15 years Sandvik has worked actively with encouraging the informal and formal networks within the organization across national borders.
The cost of sending an expatriate abroad do not at all affect the staffing decision at Sandvik if that is the most suitable candidate for the assignment. However, if the cost can be avoided by hiring a local manager this is something that is taken in consideration, but firstly the candidates are evaluated for their skills and characteristics, and after that the aspect of costs are brought into the picture. The average product area manager stays on the foreign market for approximately 4 years, and Sandvik aim at keeping it this way since it bring flexibility to the organization. The length on the stay has a positive impact on the organization since it mean that there are constantly bearers of the Sandvik corporate culture around the world and the level of third-country national managers in the organization is increasing. Today about a third of all Sandvik expatriates originate from a third country. Governmental rules, policies and regulations of the host country is not something that Sandvik regard in the staffing decision for top managerial positions on foreign markets.
[49]

STAFFING POLICIES OF SWEDISH MNCs
ANALYSIS
In this chapter the collected data will be analysed using the conceptual framework which was developed and presented in chapter 2. First the collected data will be analysed case by case, resulting in four within-case analyses. After this the four analysed cases will be compared with each other to form a cross-case analysis.
The empirical data collected from the interviews with IKEA, Atlas Copco, SKF and Sandvik are analysed case by case using the conceptual framework that was developed in order to answer the three research questions and fulfil the purpose presented in the first chapter of this thesis.
Factors Influencing Staffing Decision
The framework that was developed by Perlmutter (1969) and discussed in the literature review can aid when it comes to determining the mindset of the organization. IKEA would place itself in the geocentric mindset as the nationality of the manager does not influence the staffing decision. However, the manager become a carrier of the IKEA culture and that would indicate a more ethnocentric approach but it is foremost the global perspective of the manager which is emphasised and rewarded which is in the lines with a geocentric approach.
The motive behind IKEA’s international transfer of managers is, according to the Edström and Galbraith (1977) classification, foremost to develop managers but there are some elements of filling positions as well. IKEA see international experience as invaluable in order to develop future managers, on the other hand the power of the human resource department is moderate and they more often work reactively with filling positions when the need is brought to light from the subsidiary which create a lack of strategic approach to the staffing decision.
Selection Process
The selection process depicted in the ‘Flowchart of the selection process’ which was the result of Tung’s (1981) research does not describe IKEA’s selection process. As IKEA’s selection process today is solely based on recommendations the aspect of HCN-, PCN-, or TCN manager is never considered as such, the selection is immediately made on a more ‘personal’ level. The five steps proposed by Black et al. (1999) to the selection process is more or less followed, the process start with the creation of the selection team that, for top managerial positions on foreign markets, consist of the Board of Executives and HR representative.
The selection team does not have a pre-set assignment profile but rather that each position requirement is unique, this make IKEAs selection process rather informal and the fact that it is based on recommendations would define it as closed according to Harris and Brewster's
(1999) classification. This makes IKEA’s selection process closely linked to the subjective opinions of the selectors which can, according to Harris and Brewster (1999), lead to that
[50]

STAFFING POLICIES OF SWEDISH MNCs
ANALYSIS managers with characteristics that are inconsistent and incoherent with those of an effective international manager are selected. Previous international experience it not a conclusive selection criteria even though it is something which is preferred.
In general IKEA see previous achieved results as a strong determinant of which results to expect in the future which is in accordance with the US companies referred to by Black et al.
(1999) on the other hand Dowling and Welch (2004) point to that achievements in the past is no guarantee for future results.
Motives for Local Recruitment as Opposed to Dispatching Expatriates from Home
According to Harzing’s (2001) analogy regarding the role of the manager, IKEA’s international managers can be interpreted as a mix of the Bear- and Spider roles. The Bear role is connected to the control aspects and the IKEA manager’s function as a replacement of centralized decision making through control of key figures. The Spider role on the other hand refers to the informal communication networks which IKEA’s managers also create and thereby create another level of control than just the reporting key figures.
The aspect of control is something which is taken into consideration if the cultural differences between the host-country and Sweden are large and this is something that both Scullion and
Collings (2006) and Dowling and Welch (2004) support. At IKEA the corporate language is
English and the language barriers that Scullion and Collings (2006) speak of are not something which IKEA experience or take into consideration, however knowledge of English is essential. Local market knowledge is another important selection criteria that according to
Dowling and Welch (2004) would favour the use of a HCN manager, on the other hand IKEA see this as something that can be learned by the manager once in place. The cost of sending an expatriate manager is put in relation to future revenues that the manager would generate based on his/hers assessed skills and according to Scullion and Collings (2006) this often favour the use of a HCN manager.
Scullion and Collings (2006) further raised the issue of that international assignments often are limited to a certain point in time when PCN- or TCN managers are employed, although this is not something that IKEA consider and they do not have any statistics of how the duration of international assignments differs depending on the nationality of the manager.
Dowling and Welch (2004) advocate that governmental policies is something which can favour the use of a HCN manager, however this is something that IKEA has only experienced on rare occasions where the political climate has influenced the selection of manager. Scullion and Collings (2006) advocated that the age of the subsidiary would influence the choice of manager, however this is not something which IKEA considers which neither consider the size of the subsidiary as proposed by Harzin (2001).
[51]

STAFFING POLICIES OF SWEDISH MNCs
ANALYSIS
Factors Influencing Staffing Decision
Permutter’s (1969) theory regarding how the mindset of an organization evolves from ethnocentric to geocentric correlate with the evolvement of Atlas Copco’s staffing decision, and Atlas Copco do today have a truly geocentric approach to staffing and even though the organizational structure of the whole organization is decentralized they have a centralized approach to staffing.
According to the criteria formed by Edström and Galbraith (1977) the motive behind Atlas
Copco’s international transfer of managers is to develop the organization. This originates from the organizations overall strategy and global approach to staffing, where they have many expatriates originating from many different nationalities working in a wide range of countries.
However according to Edström and Galbraith (1977) this approach place great power to the
HR department and at Atlas Copco the power of the HR department is limited, the motive therefore tends to be a mix of developing the organization and developing managers. This is further supported by Atlas Copco’s focus on the importance of international experience in the high potentials management development process and their strategic work with developing managers to fulfil the organizations future needs of international managers.
Selection Process
Atlas Copco’s selection process does not follow the initial steps in Tung’s (1981) ‘Flowchart of the selection process’ as they not begin with asking the question whether or not the position can be filled by a HCN manager. The selection process beginning is more in the lines of that proposed by Black et al. (1999) where it begins with the creation of the selection team, after which they define the strategic purpose for the global assignment and develop the selection criteria. In order to decrease the level of subjectivity Atlas Copco apply ‘grandfather principle’ which is not mentioned in present literature regarding international manager selection process, on the other hand it is one way to handle the step of reviewing the candidate pool as proposed by Black et al. (1999).
In Atlas Copco’s selection process candidates are only identified through applications despite the existence of the ‘high potentials database’, this is however connected to that an important selection criteria for them is that the individual him-/herself must be motivated enough to apply on their own. In the light of this it is clear that the selection process is open and formal according to Harris and Brewster’s (1999) classification and which further enables the most equal allocation of HCN-, PCN-, and TCN managers.
The applying candidates are selected on basis of technical skills and previous achieved results, which according to Dowling and Welch (2004) is a common procedure but that not always generate the best results. However, Atlas Copco does also consider the personal characteristics of the individual which is evaluated through personality tests and assessments and this is something that Dowling and Welch (2004) point to be a good solution.
[52]

STAFFING POLICIES OF SWEDISH MNCs
ANALYSIS
Motives for Local Recruitment as Opposed to Dispatching Expatriates from Home
The role of Atlas Copco’s managers can, according to Harzing’s (2001) analogy, be described as a Bear. This is connected to that in Atlas Copco’s decentralized structure the role of the international manager fill the lack of centralized decision making through ‘freedom with responsibility’ and create a surveillance of subsidiary performance, which later is controlled by headquarters via results and key figures.
The control of Atlas Copco’s foreign subsidiaries and affiliates is strong with constant control of delivered results from the foreign subsidiaries and clear directions through the assigned
‘mission’ which is something that Scullion and Collings (2006) as well as Dowling and
Welch (2004) support. At Atlas Copco the corporate language is English and knowledge of
English is essential to receive a top managerial position in a foreign market, and having ‘the right person at the right place’ is something which their strategy underlines, further, if there is low knowledge of English in the host country is important that the manager speak the local language this to avoid language barriers that Scullion and Collings (2006) refers to.
Knowledge of the local market would be beneficial but Atlas Copco does not see that as a necessary selection criteria. Due to that Atlas Copco see expatriates as a necessity in order to develop a global knowledge the cost of sending expatriates does no influence the selection process but in rare cases it can have a bearing of the staffing decision because it, as Scullion and Collings (2006) advocate, can favour the use of a HCN manager. Further Scullion and
Collings (2006) raised the issue that use of expatriates can create a lack of consistency in foreign operations due to that international assignments often are limited to a certain point in time. However, Atlas Copco strive for the not having a manager longer than 5 years in a position as they feel it correlates with their international strategy to be flexible.
Scullion and Collings (2006) advocated that the age of the subsidiary would influence the choice of manager, however that is not the case in Atlas Copco staffing strategy and neither does governmental laws and regulation affect the decision.
Factors Influencing Staffing Decision
The aim of SKF’s international operations is that they should be managed by a local manager this would distinctively classify them as polycentric according to the Perlmutter (1969) framework due to their emphasis on the importance of understanding cultural differences.
However, when entering an immature market SKF prefer to use a PCN manager or a TCN manager from one of their more mature markets, which place them in a mix between a ethnocentric- and polycentric approach. The nationality of the manger is not of importance, the focus is on understanding of the local culture and foremost understanding of the SKF culture and way of doing business. The international manager becomes a significant transporter of the SKF culture across national borders.
[53]

STAFFING POLICIES OF SWEDISH MNCs
ANALYSIS
The motive behind SKF’s international transfer of managers is, according to the Edström and
Galbraith (1977) classification, to develop managers. This is because they foremost send expatriates with specific competences to developing countries, and that the international placements are seen as a step in the individual’s education for future positions within the organization. However, SKF’s appear to still have a strategic approach to the staffing decision and this implies that they lean towards developing the organization, this is further supported by their frequent use of TCN mangers.
Selection Process
SKF always start the selection process by investigating if the vacant position can be filled by a local manager, this imply that they follow the beginning of the ‘Flowchart of the selection process’ as proposed by Tung (1981). This is something which they determine by investigating the maturity of the market and determining the level of interaction required with the local market. Further, SKF follow the rest of the steps proposed by Tung (1981) but the process could also be compared to the five step selection process presented by Black et al.
(1999).
The selection team, which are the ones determining if the position can be filled with a HCN manager, consist of the group executive board and the HR representatives. The process is formalized and this together with that the goal is to announce all positions publicly categorise
SKF’s selection process as open/formal according to Harris and Brewster’s (1999) framework, this is beneficial if the goal is to create a equal balance of HCN-, PCN-, and TCN managers. Personal recommendations are not a part of the SKF selection process and this reduce the risk of subjectivity in the selection process, the candidates are assessed on personal characteristics and skills together with previous results. However, the results evaluation focus more on ‘how’ the results were achieved than ‘what’ they are and this improve the evaluation of past achievements according to Dowling and Welch (2004) and Black et al. (1999) whom argue that past results easy can become misleading.
Motives for Local Recruitment as Opposed to Dispatching Expatriates from Home
Harzing’s (2001) framework concerning the role of the manager place SKF’s international managers in the Spider category, this is connected to the strong focus on social networks within the SKF organization. The international managers of SKF thereby, in accordance with
Harzin (2001), create informal social networks across divisions and national borders, as this is done a level of social control is established which provide more information than just key figures on how the actual operations in the country is going which further is supported by
Scullion and Collings (2006) and Dowling and Welch (2004).
SKF emphasise the knowledge of the local language during the selection process and this, as mentioned by Scullion and Collings (2006) favour the use of HCN mangers within the organizations international operations. SKF have English as corporate language but still stress the need to know the local language for positions such as sales that have direct interaction with the local market. For such positions SKF further highlight that it is important with actual knowledge of the local market and region which the theory by Dowling and Welch (2004) also emphasise and propose would support the use of HCN managers.
[54]

STAFFING POLICIES OF SWEDISH MNCs
ANALYSIS
SKF’s focus on skills and ‘how’ the manager achieves results, the aspect of the cost thereby loses its importance. However, they do still, as Scullion and Collings (2006) suggest, take this in consideration and relate it to the future expected results. Scullion and Collings (2006) further raised the issue of that international assignments often are limited to a certain point in time when PCN- or TCN managers are employed, although this is something that SKF consider they do not see that the mobility of managers would have a negative impact on foreign operations.
Dowling and Welch (2004) advocate that governmental policies is something which can favour the use of a HCN manager but this is something which SKF rarely consider in the selection process. Scullion and Collings (2006) argued that the age of the subsidiary would influence the choice of manager and this is something which can be seen in the SKF staffing decision, for a more mature market a HCN manager is preferred by SKF which is in accordance with present theory.
Factors Influencing Staffing Decision
Sandvik started out as ethnocentric but is today primarily polycentric and this is in accordance with Perlmutter’s (1969) theory. This is connected to that Sandvik strive towards having as many local managers as possible managing their foreign operations. The motive behind
Sandvik’s international transfer of managers is according to Edström and Galbraith’s (1977) classification a mix between developing managers and developing organization.
The reason for this is that Sandvik partly consider international experience as an important part of the process to strategically develop future managers, however due to the strategic aspects and that Sandvik consider the transfer of knowledge across national borders as an important part in the process of creating a global organizational knowledge and establish a socialized control there are also elements of organizational development motives.
Selection Process
Sandvik’s aim is to have as many local managers as possible and therefore they begin the selection process with analysing if the position can be filled with HCN manager, this is the same initial step as Tung (1981) proposed. The selection team which make this decision consist of the product area manager and one HR representative, and Sandvik follow the steps proposed by Tung (1981) and the process which Sandvik applies also has a strategic objective and can also be classified in accordance to the five steps of the strategic selection process by
Black et al. (1999).
During the selection process Sandvik do not use any standardized tests, however the results from the tests that they apply during their annual MDRs is used and this decrease the level of subjectivity. However, since the candidates often are identified through the annual reviews of talents within the organization, even though the aim is to announce them publicly, this classify Sandvik’s selection process more as a closed than open in accordance with Harris and
[55]

STAFFING POLICIES OF SWEDISH MNCs
ANALYSIS
Brewster’s (1999) theory. Further the selection process can be categorized as formal since the pre-set profile of the candidate that is developed during the substitute plan is followed. As
Sandvik is a highly technical company the technical competence of the candidate is of importance in the selection process, and this agree with Dowling and Welch (2004) who stated that this is common for many organizations.
Sandvik do consider previous international experience and personal characteristics but the focus is on technical skills together with personal recommendation which according to Black et al. (1999) could result in that the best candidate is not chosen for the mission.
Motives for Local Recruitment as Opposed to Dispatching Expatriates from Home
The international managers of Sandvik has, according to Harzing’s (2001) analogy, the role of the Spider as they are constantly encouraged to create formal- as well as informal networks.
The social control which they create can also be established by Bumble-bees, but Sandvik’s employees show a low turn-over rate and do not ‘fly from plant to plant’ as Bumble-bees do according to Harzing (2001). The manager’s role as spider is important and increase
Sandvik’s customer orientated work as it increases their local market responsiveness according to Harzing’s (2001) theory.
Knowledge of the local language is an important selection criteria, another important selection criteria for Sandvik is the candidate’s technical competence, this is, as Harzing’s (2001) theory suggests connected to that they operate in a highly technical industry. Knowledge of the local language is an essential selection criterion even though the corporate language is
English, and this result in, as the theory by Scullion and Collings (2006) suggest, that HCN managers are favoured for top managerial positions on foreign markets by Sandvik.
Scullion and Collings (2006) further raised the issue of that international assignments often are limited to a certain point in time when PCN- or TCN managers are employed, however
Sandvik feel that the average time of 4 years for international manager tasks bring flexibility to the organization and they aim at keeping it that way even if they employ a HCN manager.
Governmental policies, rules and regulations were something which Dowling and Welch
(2004) claimed could affect the staffing decision, although this is something which Sandvik never has taken into consideration. According to Scullion and Collings (2006) the age of the subsidiary could influence the staffing decision and Harzing (2001) argue that the size of the subsidiary is of importance, however Sandvik considers neither of these things.
A cross-case analysis is conducted through that the multiple within-case analyses carried out in the previous section are compared with each other. This is done in order to learn similarities as well as differences and thereby increase the possibility to discover overall patterns among the cases. A Cross-case analysis will further provide an understanding of different situations and thereby increase the opportunity of explaining factors that influence the staffing decision among Swedish MNCs, describe their selection process and discover the motives of recruiting an HCN manager as opposed to a PCN- or TCN manager.
[56]

STAFFING POLICIES OF SWEDISH MNCs
ANALYSIS
Factors Influencing the Staffing Decision
In Table 5.1 the material from the within case analyses is summarized and compared to each other. Differences and similarities between the cases will be highlighted in the discussion that follows.
Table 5.1 Factors Influencing the Staffing Decision
Source: Author
The four case companies operate in different industries but share the aspect that all of them are Swedish MNCs who has been operating on the global market for many years. IKEA classify themselves as a geocentric organization with a global approach to staffing, however its main motive for international transfer appear to be filling positions combined with developing managers. Atlas Copco also see it selves as geocentric and the motive for their international transfers is classified as to develop the organization. A geocentric mindset together with a motive to develop the organization through international transfers results in that their international staffing policy is strategic and closely linked to their overall international business operations.
SKF’s mindset is a mix of ethno- and polycentric and the motive behind the international transfer of managers is to develop future managers, and SKF is very strategic in their staffing approach for top managerial positions. However, both SKF and Sandvik show polycentric influences when an important factor that influence the staffing decision is the cultural differences and that a local manager is preferred for top managerial positions in foreign markets.
The motive which is most closely linked to the company’s overall internationalization strategy is if the motive is to develop the organization, then the staffing policy facilitates the process of achieving a sustainable global competitive advantage through ensuring that a global knowledge is developed and kept within the organization. On the other hand, through developing managers this can also be achieved and this is proven since Atlas Copco and SKF are the two cases who’s staffing policies shows the clearest strategic linkage.
The Selection Process
In Table 5.2 the material from the within case analyses is summarized and compared to each other. Differences and similarities between the cases will be highlighted in the discussion that follows.
[57]

Table 5.2 The Selection Process
STAFFING POLICIES OF SWEDISH MNCs
ANALYSIS
Source: Author
The flowchart of the selection process as presented by Tung (1981) is proven to be accurate only for companies showing influences of a polycentric mindset in their staffing policy. From the four cases researched in this study SKF and Sandvik are the only two that follow the process proposed by Tung (1981) as they start with investigating if the task can be fulfilled by a local HCN manager. However, if one would disregard that first step in Tung’s (1981) process the steps are followed by all four case companies as it proposes a more general model.
A more general model was also the strategic approach to the selection process for specific assignments which Black et al. (1999) proposed. The five steps in the selection process for specific assignments is followed by all four case companies with the exception of IKEA,
IKEA differs as they do not have a open selection process and the identification of candidates is conducted via the selectors personal network and subjective opinions. The members of the selection team vary depending on the organizations overall structure, but as Black et al.
(1999) suggest all selection teams consist of both HR representatives and upper level managers. Atlas Copco is much decentralized and that is showed through that the selection team is created at divisional level, while IKEA and SKF involve the Board of Executives in the staffing decision.
The formality of the organization together with the level of strategic incitements influences how the selection criteria are established along with the review of candidate pool. IKEA has an informal process according to Brewster and Harris (1999) typography and this does that the selection criteria is mostly established though the selectors subjective opinions and judgements and the review of the candidate pool is conducted within their personal networks.
Atlas Copco has a highly formalized selection process and eliminates the risk of subjectivity through only accepting applications and that the final decision must be approved according to the grandfather principle. The same grandfather principle is adapted by Sandvik but in their selection process there is still some level of subjectivity as personal recommendations is considered in the selection process. SKF work consistently with talent management and
[58]

STAFFING POLICIES OF SWEDISH MNCs
ANALYSIS identify candidates through applications but also through their internal database which is one way that according to Black et al. (1999) is strategically beneficial to gain long-term sustainability. At IKEA and SKF it is the Board of Executives that makes the final offer whilst at Atlas Copco and Sandvik the grandfather approval has to be achieved before the offer is made.
The grandfather approval can decrease the level of subjectivity which, as Sandvik do not have a fully open selection process, is important. The level of subjectivity is strong at IKEA since the process is closed and informal and according to Harris and Brewster (1999) this can result in that an individual who best would match the task requirements is not taken in consideration.
Motives for HCN recruitment as opposed to PCN/TCN recruitment
In Table 5.3, the material from the within case analyses is summarized and compared to each other. Differences and similarities between the cases will be highlighted in the discussion that follows.
Table 5.3 Motives for HCN recruitment as opposed to PCN/TCN recruitment
Source: Author
Harzing’s (2001) animal analogy regarding the role of the manager shows that the overall organizational structure tends to affect the role of international managers in foreign markets.
Atlas Copco is much decentralized ad the role of the international managers can therefore be categorized as bears whilst SKF’s strong corporate culture and cross national networks give the international managers the role of spiders. Sandvik on the other hand, emphasize how managers are the ones transferring the culture across borders by ‘cross pollinating’ the organization and their mangers do therefore take on the role as bumble-bees.
IKEA’s managers show traces of both bears and spiders as they weave the informal social networks and at the same time ensure control aspects in IKEAs international franchise organization. The factor of control is however not an important factor during the staffing decision considerations at IKEA, while it is something which Atlas Copco and Sandvik regard as important and SKF as highly important. IKEA do not weigh in language barriers in the selection process, while it is something that the other three case companies regard as important. SKF see knowledge of the local market as a necessity and this can be connected to
[59]

STAFFING POLICIES OF SWEDISH MNCs
ANALYSIS their polycentric mindset that was established in the previous section of this thesis, SKF do however consider the cost of sending an expatriate manager abroad in relation to the expected results which is something that favours the use of a HCN manager. This is something which is also done by Atlas Copco, while Sandvik and IKEA agree on that the cost of sending an expatriate abroad do not influence their staffing decision.
None of the four cases studied feel that governmental policies affect their staffing decision,
IKEA mention it can do so on rare occasions but that it is not something which affect their general staffing policy for top managerial positions in foreign markets. However, both Atlas
Copco and SKF agree on that the age of the subsidiary affect the staffing decision as an immature market may require a PCN-/TCN manager from a more mature market to enforce the corporate culture in the new country.
[60]

STAFFING POLICIES OF SWEDISH MNCs
DISCUSSIONS, CONCLUSIONS AND IMPLICATIONS
In this chapter the overall findings and conclusions drawn from the analyses in the previous chapter is presented, and thereby the research questions presented in the first chapter will be answered.
The purpose of this thesis was to investigate the staffing policies for Swedish MNCs and by presenting the conclusions drawn from the gathered data and analyses it is thus fulfilled.
Further the implications that this research has for international human resource management, in theory as well as for practitioners will be stated, followed by implications for future research.
It is first worth noting that the theory developed by Perlmutter (1969) to investigate the mindset of the organization was not intended to look at human resource management.
However, as it takes the individuals within the organization into consideration in relation to internationalization, it has become a suitable theory that has been widely used within the area of international human resource management and was therefore considered suitable for this study. The four cases studies verify to some extent that the mindset of the organization depend; on the level of internationalization of the company. It is interesting however, that one company who has been present on the global market for a long time has influences of a polycentric mindset. This goes against the present theories that the ultimate stage for an organization is to become geocentric, as that organizations ultimate goal is to fill all positions locally.
The background as to why organizations engage in international transfers of managers is, by theory, advocated to affect the staffing decision for top managerial positions in foreign markets. This study consisting of four Swedish MNCs verify that the reason behind the transfer clearly affect the staffing decision and which candidates taken in consideration latter during the selection process. Further, the mindset of an organization clearly affect the staffing decision for key managerial positions in foreign markets as it determines which candidates the organization will take in consideration to participate in the selection process.
Findings of this study indicate that the mindset of the organization along with the reason for international transfer clearly influence the staffing decision for key managerial positions for foreign markets and the theories tested are therefore strengthened and verified by the empirical data.
[61]

STAFFING POLICIES OF SWEDISH MNCs
DISCUSSIONS, CONCLUSIONS AND IMPLICATIONS
Based on the discussion above the following specific conclusions regarding factors that influence the staffing decision for key managerial positions for foreign markets can be drawn:

The mindset of the organization clearly influences the staffing decision.

Polycentric and Ethnocentric organizations take the nationality aspect into consideration and in their staffing decision making favour to HCN as opposed to PCN candidates.

The reason behind the international transfer influence the staffing decision.

The reason behind the international transfer is connected to the organizations overall international strategy.
In this study foremost two frameworks were used to analyse the selection process for Swedish
MNCs for top managerial positions for foreign markets. The findings of this study indicate that for organizations with a strategic approach to the selection process, the five steps in the
Selection Process for Specific Assignments are strengthened and verified. Further the findings point towards a linkage between the mindset of the organization and the organizations selection process. The studied cases which had a polycentric mindset also adapted the steps in
Tung's flowchart of the selection process. Organizations with a geocentric mindset do not consider nationality at all during the selection process as they view the process from a global perspective. The selection team for top managerial positions for foreign markets often consist of the board of executives along with HR representatives. The ideal candidates profile appear to be hard to asses and the findings of this study indicate that there is not one universal profile for and international manager but rather that each profile is developed situation specifically.
They way that potential candidates are identified differs between the studied organizations, the findings of this study indicate further that the way candidates are identified is connected to the organizations overall strategy and vary depending on the openness of the selection process.
The results of this study further indicate that in order to create an equal selection process which aim at selecting the most suitable individual for the mission the selection process should be open and formal. This is connected to that a formal selection process decreases the influence of the selectors subjective opinions. Three out of four studied companies present a formal selection process which indicates that it is common that Swedish MNCs have a formal selection process for top managerial positions for foreign markets, however consideration must be made to the small research sample. The openness of the selection process vary, but all four case companies agree on that an open selection process is their goal, however one of the studied companies currently has a fully closed selection process for top managerial positions on foreign markets which create a staffing decision highly influenced by subjectivity. The companies that have an open/formal selection process appear to have a more strategic approach to the staffing decision, where aspects to satisfy the organizations future needs
[62]

STAFFING POLICIES OF SWEDISH MNCs
DISCUSSIONS, CONCLUSIONS AND IMPLICATIONS regarding international managers are taken into consideration. Two of the studied companies apply a ‘grandfather principle’ in the selection process which appear to be an effective way to decrease the level of subjectivity influencing the staffing decision.
Based on the discussion above the following specific conclusions regarding MNC’s selection process for top managerial positions for foreign markets can be drawn:

For MNCs that have a polycentric mindset the selection process start with investigating if the position can be filled by a HCN manager.

There is no universal candidate profile, the selection criteria for top managerial positions in foreign markets is situation specific.

The selection team consist of top management and HR representatives.

The methods of identifying candidates vary depending the openness of the selection process.

An open selection process is desirable but hard to achieve.

A formal selection process decreases the influence of the selector’s subjective opinions.

A formal selection process is beneficial in order to recruit the most suitable candidate.

Applying a ‘grandfather principle’ can be one way to decrease subjectivity.
It should be noted that most of the research today concerning international managers in foreign markets is focusing on the use of expatriates and then foremost the use of PCN managers. The conceptual framework developed in this study have a foundation in that research whilst the empirical data focused more on aspects which favour the use of HCN managers, this present an opportunity to compare the motives of HCN recruitment as opposed to PCN or TCN recruitment.
The role which the international manager is expected to have will influence which candidates that are taken into consideration for the assignment. A manager who is expected to have ‘the bear role’ is more likely to be an PCN or a TCN from a more mature market as this role is closely linked to establishing a distant control and fill the gap from headquarters in a decentralized organization. Therefore the recruitment of a manager is often clearly linked to the level of control which the manager is expected to perform once present in the local market. On the other hand if the manager is anticipated to focus on developing informal social networks, the role of ‘the spider’ might be focus of the selection criteria. If the social networks in the local market need to be reinforced a HCN manager will be beneficial as he/she would have knowledge of local customs and culture.
A HCN manager is also of advantage if the line of work requires close cooperation with the local customers and great knowledge of the local market. The strength of the corporate culture is something that affects the staffing decision, depending on if the manager is supposed to
[63]

STAFFING POLICIES OF SWEDISH MNCs
DISCUSSIONS, CONCLUSIONS AND IMPLICATIONS transmit the corporate culture across national borders. If the manager is to be the carrier of the culture, the staffing policy favours the use of a PCN manager or a TCN from a mature market.
Sending a PCN or TCN manager to a new market is connected to costs that can be avoided through the use of a HCN manager, however, the findings of this study indicate that if the candidate is ‘the right one’ the extra costs connected to expatriates are not an issue. Present research claim that the use of expatriate managers affect the continuity of the operations in the local market, although the organizations who participated in this study argue that this bring a desired level of flexibility to the organization. Governmental rules and regulations is something that is not considered by the studied organizations throughout their staffing policies and the findings of this study therefore weaken that theory and discard that argument.
The age of the subsidiary is something that two of the studied organizations take in consideration and they argue that for immature markets it is favourable to use PCNs or TCNs from mature markets.
Based on the discussion above the following specific conclusions regarding local recruitment as opposed to dispatching expatriates from home- or third country can be drawn:

The future role of the manager influences the nationality of the selection base.

A HCN manager will be beneficial if the aim is to establish local social networks, have a close cooperation with the end customers.

A PCN manager will be beneficial if the aim is to transmit the corporate culture and increase level of control from headquarters.

A TCN manager from a mature market will also be beneficial if the aim is to transmit corporate culture.

Language barriers is considered if the assignment require great interaction with the locally host market, this favour HCN candidates or TCNs from a country with the same mother tongue.

Local market knowledge is desirable but not required; this is an advantage for HCN candidates.

The cost of sending expatriates is not a decisive issue in the staffing decision.

International managers in top positions should not remain in place for further than 5 years to achieve desirable results and create flexibility to the organization, irrespective of if it is a HCN, PCN or TCN manager.

The age of subsidiary could favour use of PCNs or TCNs from mature markets.
With a foundation in the conclusions presented above the following implications for theory and practitioners has been drawn along with recommendations for future research.
6.4.1
Implications for Theory
The purpose of this study was to investigate the staffing policies of MNCs for top managerial positions for foreign markets. Present research regarding the thesis topic was applied and created a conceptual framework that combines several aspects of the staffing policies of
[64]

STAFFING POLICIES OF SWEDISH MNCs
DISCUSSIONS, CONCLUSIONS AND IMPLICATIONS
MNCs. Through combining different aspects of present research a deeper understanding has been gained. However, this framework should be further tested to determine its accuracy in describing the staffing policies for top managerial positions of MNCs in foreign markets. The findings of this study indicate that there is a relationship between the mindset of the organization and selection process, the mindset affect which way the selection process is carried out. Further this study indicate that the ‘grandfather principle’ play an important role in order to decrease the level of subjectivity from the selectors in the selection process and should therefore be considered in future theories.
6.4.2
Implications for Practitioners
The aim with this study has constantly been to investigate the staffing policies of MNCs for top managerial positions in foreign markets and in this section implications spurned from the results of this study is presented as recommendations for managers working with these issues.
There is no universal staffing policy which can be adapted for all top managerial positions in foreign markets; however some guidelines are concluded from the results of this study:

To increase the strategic aspects of staffing, the reason behind international transfers should be to develop organization.

An organization should always start with investigating if the position can be filled with a HCN national.

The selection team should consist of HR representatives as well as top management.

Selection criteria is situation specific, however there should be a pre-set way of determining that criteria.

Potential candidates should be identified through applications.

Selection should be made based on the candidates match with the previously set criteria.

A ‘Grandfather principle’ should be applied before the final decision is made.

The role of the manager should be connected to the overall strategy.

A PCN manager increases headquarter's control in the foreign market.

A HCN manager increases organizations knowledge of the foreign market and aid in building social networks at local level.

A TCN manager can facilitate the transfer of corporate culture between different countries and regions.
6.4.3
Recommendations for Future research
The majority of the theories tested and applied in the conceptual framework corresponded with the empirical data, and the theories are therefore verified by applicability. On the other hand, this case study was conducted during a limited time period and did only consist of four cases; a larger study would be of interest in order to determine if the findings are applicable on other cases as well.
Further, the findings of this study indicate a connection between the mindset of an organization and the way that the selection process is conducted, further research would be of interest in order to confirm or discard the relationship. However, during the process of
[65]

STAFFING POLICIES OF SWEDISH MNCs
DISCUSSIONS, CONCLUSIONS AND IMPLICATIONS conduction this study interesting research areas that did not fit into the research purpose was brought to light, this is areas that would benefit from further research.
Based on the discussion above the following specific recommendations regarding future research is concluded:

It would be interesting to study the effects that a closed/informal selection process has on the organizations overall operations in relation to long-term sustainability.

In order to determine if the differences in selection processes are tied to industry specific features, a larger study taking industry aspect in consideration would be of interest.

This study found indications that the mindset of the organization affect the shaping of the selection process, it would further be interesting to investigate if there is a dual relationship and that the selection process in turn affect the mindset of the organization.

A comparative study, comparing staffing policies of MNCs from different countries, would be of interest.
[66]

STAFFING POLICIES OF SWEDISH MNCs
REFERENCES
Adler, N. J. (1994). Competitive Frontiers: Women Managing across Borders. Journal of
Management Developement , 13 (2), 24-41.
Black, S. J. (1988). A Study of American Expatriate Managers in Japan. Journal of
International Business Studies , 19 (2), 277-294.
Black, S. J., Gregersen, H. B., Mendenhall, M. E., & Stroh, L. K. (1999). Globalizing People
Through International Assignments.
Addison-Wesley Publishing Company.
Bryman, A., & Bell, E. (2005). Företagsekonomiska forskningsmetoder.
Colakoglu, S., Tarique, I., & Caligiuri, P. (2009). Towards a conceptual framework for the relationship between subsidiary staffing strategy and subsidiary preformance. The
International Journal of Human Resource Managemen , 20 (6), 1291-1308.
Collings, D. G., Scullion, H., & Dowling, P. J. (2009). Global staffing: a review and thematic research agenda. The International Journal of Human Resource Management , 20 (6), 1253-
1272.
Denscombe, M. (2009). Forskningshandboken : för småskaliga forskningsprojekt inom samhällsvetenskaperna. Lund: Studentlitteratur.
DiMaggio, P., & Powell, W. W. (1983). The iron cage revisited: Institutional isomorphism and collective rationality in organizational fields. American Sociological Review , 48 , 147-
160.
Dowling, P. J., & Welch, D. E. (2004). International Human Resource Management:
Managing people in a multinational context (4 ed.). London: Thomson Learning.
Edström, A., & Galbraith, J. R. (1977). Transfer of Managers as a Coordination and Control
Strategy in Multinational Organizations. Administrative Science Quarterly , 22 (2), 248-263.
Farhang, M. (1999). Managerial Resources for Global Marketing A Study of Foreign
Subsidiary Manager Selection in Swedish Multinational Firms (Research Report, Luleå
University of Technology, 1999:12)
Harris, H. (2001). Researching discrimination in selection for international management assignments: the role of repertory grind technique. 16 (3), pp. 118-125.
Harris, H., & Brewster, C. (1999). The coffee-machine system: how international selection really works. The International Journal of Human Resource Management , 10 (3), 488-500.
Harris, H., & Kumra, S. (2000). International manager development: Cross-cultural training in highly diverse environments. Journal of Management Development , 19 (7), 602-614.
Harzing, A.-W. (2001). Who's in Charge: an Emperical Study of Executive Staffing practices.
Human Resource Management , Summer , 139-158.

STAFFING POLICIES OF SWEDISH MNCs
REFERENCES
Harzing, A.-W. (2004a). Internationalization and the International Division of Labour. In
Harzing, A.-W., & Van Ruysseveldt, J. (Eds.), International human resource management (2 ed.). London: Sage.
Harzing, A.-W. (2004b). Composing an International Staff. In Harzing, A.-W., & Van
Ruysseveldt, J. (Eds.), International human resource management (2 ed.). London: Sage.
Harzing, A.-W., & Van Ruysseveldt, J. (2004). International human resource management (2 ed.). London: Sage.
Hatch, M. J. (2002). Organisationsteori. Moderna, symboliska och postmoderna perspektiv.
Lund: Studentlitteratur.
Hofstede, G. (1994). Cultures and organizations : software of the mind : intercultural cooperation and its importance for survival. London: Harper Collins.
Hurn, B. J. (2006). The selection of international business managers: part 1. Industrial and
Commercial training , 38 (6), 279-286.
Johnson, G., Scholes, K., & Whittington, R. (2005). Exploring Corporate Strategy (7 ed.).
Harlow: Financial Times Prentice Hall.
Kopp, R. (1994): International Human Resource Policies and Practices in Japanese, European and United States Multinationals, Human Resource Management , vol. 33 no. 4 (Winter), pp.
581-599.
Linehan, M., & Walsh, J. S. (1999). Recruiting and developing female managers for international assignments. Journal of Management Development , 18 (6), 521-530.
Miles, M. B., & Huberman, M. A. (1994). Qualitative data analysis : an expanded sourcebook. Thousand Oaks: Sage Publications, Inc.
Perlmutter, H. V. (1969). The tortuous evolution of the multinational corporation. Columbia
Journal of World Business , Jan/Feb , 9-18.
Phatak, A. V., Bhagat, R. S., & Kashlak, R. J. (2005). International Management.
New York:
McGraw-Hill.
Robson, C. (2002). Real world research (2 nd
Ed.). Oxford: Blackwell
Saunders, M., Lewis, P., & Thornhill, A. (2007). Research methods for business students (4 uppl.). Harlow: Financial Times/Prentice Hall.
Scullion, H., & Collings, D.G. (2006) “International Staffing”, in G. K. Stahl and I. Björkman
(eds.) Handbook of Research in International Human Resource Management, Cheltenham,
Edward Elgar.
Scullion, H., & Linehan, M. (Eds.). (2005). International Human Resource Management: A critical text.
New York: Palgrave MacMillan.

STAFFING POLICIES OF SWEDISH MNCs
REFERENCES
Selmer, J., & Leung, A. S. (2003). International adjustment of female vs male business expatriates. International Journal of Human Resource Management , 14 (7), 1117-1131.
Stenbacka, C. (2001). Qualitative research requires quality concepts of its own. Management
Decision , 39, 551-556.
Taylor, S., Beechler, S., & Napier, N. (1996). Toward an Integrative Model of Strategic
International Human Resource Management. The Academy of Management Review , 21 (4),
959-985.
Tung, R. L. (1998). A contingency framework of selection and training of expatriates revisited. Human Resource Management Review , 8 (1), 23-37.
Tung, R. L. (1981). Selection and Training of Personnel for Overseas Assignments. Colombia
Journal of World Business , 16 (1), 68-78.
Waxin, M.-F., & Panaccio, A. (2005). Cross-cultural training to facilitate expatriate adjustment: it works! Personnel Review , 34 (1), 51-67.
Wild, J. J., Wild, K. L., & Han, J. C. (2008). International Business: The challanges of globalization (4 ed.). Upper saddle river, NJ: Prentice Hall.
Wilson, M. S., & Dalton, M. A. (1998). International Success: Selecting, Developing and
Supporting Expatriate Managers.
Greensboro, NC, USA: Center for creative leadership.
Atlas Copco (www.atlascopco.com) Retrieved: December 2009
IKEA (www.ikea.com) Retrieved: December 2009
Sandvik (www.sandvik.com) Retrieved: December 2009
SKF (www.skf.com) Retrieved: December 2009

STAFFING POLICIES OF SWEDISH MNCs
APPENDIX A
Namn
Titel
Antal år på nuvarande position
Totalt antal år inom organisationen
Hur många dotterbolag har ni på utländska marknader? Beskriv den ”genomsnittliga” landschefen.
Ni har verksamhet i många olika delar av världen, när det kommer till organisationen,
Anpassar ni er beroende på vart ni är eller tillämpar ni samma tillvägagångssätt som i
Sverige över hela världen? Om Ja, på vilket sätt?
Hur formaliserad är er organisation?
Förflyttas företagskulturen mellan olika delar i världen?
Jag definierar nu tre begrepp; Etnocentrisk, Polycentrisk och Geocentrisk. Hur skulle du klassificera er?
Hur synliggörs behovet av att det behövs en ny landschef, och jobbar ni för att kunna tillgodose framtida behov chefer i utlandet? Om Ja, i sådant fall hur?
Hur mycket makt har er HR avdelning om de vill välja en PCN över en HCN?
Vad är den bakomliggande orsaken till utlandsplaceringarna?
Fylla platser, utveckla framtida chefer, utveckla organisationen?
Hur påverkar kulturella skillnader mellan värdlandet och hemlandet valet av landschef?
Påverkar olika språk vem som tas i beaktning för positionen?
Hur viktigt är kunskap i det ”lokala” språket jämfört med ”koncern” språket?
Hur kommunicerar landschefen med huvudkontoret i Sverige? Svårigheter?
Är det viktigt att de har tidigare internationella erfarenheter/ erfarenheter av den specifika marknaden?
Hur går bemanningsprocessen för chefs positioner i utlandet till och vilka
urvalskriterier tas i beaktning under processen? (Beskriv)

STAFFING POLICIES OF SWEDISH MNCs
APPENDIX A
Hur sätts bemanningsteamet samman? Vilka ingår?
Hur identifierar ni potentiella kandidater? Har ni en ’global candidate pool database’
Vilken roll spelar kandidatens tekniska färdigheter?
Vilken roll spelar kandidatens personliga karaktärsdrag?
Använder ni tester eller utvärderingsinstrument för att bedöma deras lämplighet?
Hur viktigt är kännedom om företagskulturen?
Är bemanningsprocessen formaliserad? Om Ja, på vilket sätt?
Annonseras alla platser offentligt?
Är alla i organisationen medvetna om att processen pågår?
Vilken roll spelar personliga rekommendationer?
Hur skulle du beskriva den primära uppgiften för en landschef för ett av era dotterbolag och på vilket sätt kontrolleras det att den fullföljes? På vilket sätt påverkar dotterbolagets ålder landschefens uppgift?
Hur kontrolleras att de ’gör vad de ska göra’?
Hur viktigt är kontroll?
Att skicka iväg chefer utomlands är ofta förknippat med stora kostnader, hur påverkar detta ert beslut?
Hur länge stannar genomsnittschefen på sin position?
På vilket sätt påverkar det verksamheten i landet?
Skiljer detta sig mellan om det är en invånare från värdlandet eller en från ert hemland
(Svensk)?
På vilket sätt kan politiska beslut, lagar och regler påverka valet av landschef?

STAFFING POLICIES OF SWEDISH MNCs
APPENDIX A
Name
Title
Number of years on current position
(Total no of years within organization)
How many subsidiaries or affiliates do you have in foreign markets? Describe the average country manager.
You operate in many different parts of the world, in terms of organization, do you adapt to the regions in which you’re operating or do you apply the Swedish way in all regions?
If Yes, How is it done?
How formalized is your organization?
How is the corporate culture transmitted between different subsidiaries worldwide?
I will now define three concepts; Ethnocentric, Polycentric and Geocentric. How would you classify your organization?
How is the ’need’ to recruit a new country manager brought up, and do you work to foresee future demands of global managers in foreign markets? If Yes, how is it done.
How much power do your HR department has if they want to choose a PCN over an HCN manager?
What is the underlying motive for international transfers?
-filling positions, develop managers, or develop organization?
How do cultural differences between the host country and the parent country affect the staffing decision of a new country manager?
Do different languages affect who is taken into consideration for the position?
How important is knowledge in the ‘local’ language compared to the ‘corporate’ language?
How does the country manager communicate with headquarters in Sweden? Difficulties?
How important is previous international experience compared to experience of the specific market, and why?

STAFFING POLICIES OF SWEDISH MNCs
APPENDIX A
How is the selection process for international subsidiary managers in foreign markets carried out and which selection criteria are taken into consideration during the process?
(Describe)
How is the selection team put together? Who does it consist of?
How do you identify potential candidates? Do you have a ‘global candidate pool database’?
Which role do the technical skills of the candidate play in the selection process?
How important are the candidates personality traits/characteristics? Cross-cultural skills?
Do you use some kind of standardized tests and/or feedback instruments?
How important is the candidates knowledge of the corporate culture?
Is the selection process formalized? If Yes, in what way.
Are all positions publicly announced?
Are all members of the organization aware of the process taking place?
Which role do personal recommendations play in the selection process?
How would you describe the primary task for a country manager for one of your subsidiaries and in what way is it ensured that that task is fulfilled? In what way does the age of the subsidiary affect the task of the manager?
How is it controlled that they ‘do what they are suppose to’?
How important is control?
Sending home country managers international is often connected to great expenses do this, and in what way, affect your choice of manager for international assignments?
During how long time does the average country manager stay in his/her position?
In what way do this affect the operations in the country?
Do this differ depending on if there is a HCN manager or a PCN manager?
In what way’s can governmental rules, policies and regulations affect the staffing decision of an international manager for a foreign subsidiary?